Chennai as a Business Location
[Updated Oct 2020] A guide to serviced offices and office space for rent in Chennai as well as general information that may be useful if you are considering renting an office in the city.
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History & Geography
The city of Chennai is located on the Coromandel Coast off the Bay of Bengal on the south-eastern coast of India. Known as the ‘Gateway to South India’, the capital of Tamil Nadu sits on the Eastern Coastal Plains and is bisected by the Cooum and Adyar rivers. Formerly known as Madras, Chennai has been a major settlement for centuries. Up until the 12th century CE the area was ruled by the powerful Chola dynasty. In 1522 the Portuguese arrived and built the port of Sao Tome, and in 1612 the Dutch arrived in the area and established a settlement near Pulicat, to the north of Chennai. In 1639 the British arrived in the area, bought a strip of land off the Coromandel Coast and built Fort St George, the first major British settlement in India. In the succeeding years, the fort was captured by the French, returned to British hands, and withstood several sieges by the French and hostile Indian states. The fort was reinforced and a large city grew up around it. Eventually, the city became a significant naval base and trading centre. With the advent of the railway in the 19th century, the city became directly connected with other major administrative and trade centres like Bombay and Calcutta. During WW I Madras was the only city in India to come under attack when it was shelled by a German light cruiser. When India gained independence in 1947 Madras became the capital of the state of Madras, which was renamed Tamil Nadu in 1969. In 1991 Indian Prime Minister Rajiv Gandhi was assassinated in a small town close to Madras. In 1996, when many Indian cities’s were being given new names, Madras was officially changed to Chennai. Today Chennai is one of the largest cities in India and a major centre of trade and manufacturing.
Economy
Chennai has a diversified and thriving economy, the bulwark of which is the automobile industry. Around 30 percent of the country’s auto industry is located in the city and many international automakers have plants in the city. Among those with a presence in Chennai are Daimler AG, Renault, Nissan Motors and Hyundai. Another major industry in the city is the software industry. Software from Chennai comprises over 14 percent of India’s total software exports. Chennai is also a major centre of the financial services industry, with many of the world’s largest companies having back-office operations based in the city. Those who have operations in Chennai include Barclays, Goldman Sachs, HSBC, ING Group, Sumitomo Mitsui Banking, Credit Suisse, BNP Paribas and Fortis. There are also many telecoms and electronics companies with a presence in the city, among them Nokia, Motorola, Dell, Wipro, Ericsson and Alcatel-Lucent. Forbes magazine recently named Chennai as one of the fastest-growing cities in the world. A total of 24 major Indian companies with over USD 1 billion in assets are located in Chennai and by the year 2025 Chennai has been forecast to have an economy worth USD 100 billion.
Tourism & Culture
Chennai is a popular city for tourists visiting India. As recently as 2010 Chennai attracted more tourists than any other city in India. Chennai is known primarily for its long sandy beaches, many temples and various cultural centres. It functions as a gateway for all those visiting the popular southern region of India. A popular tourist destination is Mamallapuram, an ancient city close to Chennai which is a UNESCO World Heritage Site. The city dates back to the seventh century and has a range of historic monuments including Thirukadalmallai, a temple to Lord Vishnu. Most of the tourists who visit Chennai come from Sri Lanka, Malaysia and Singapore, and then the UK, France and the US. Chennai has a range of hotels and hostels, ranging from five-star palaces to those directed at backpackers and other travellers on a budget. The city also boasts a range of theme parks, among these, are Queens Land, Dash n Splash, EVP World and Kishkinta. Another reason that many visit Chennai is for health tourism. The city has world-class medical facilities and receives health tourists from all over India and the world.
Transport
The city is served by Chennai International Airport, which serves over ten million passengers every year. It is the third busiest airport in the country and has the second busiest cargo terminal. Currently, the airport is undergoing a major expansion project to enable it to handle still more cargo and passengers. Chennai itself has a large bus network, serving 5.5 million passengers daily. The city is also home to the Southern Railway and has two major rail terminals. Chennai Central is the largest and connects to major cities as well as smaller towns throughout India. Chennai also has a suburban railway network connecting different suburbs of the city.
Office space for rent in Chennai
Despite the recent financial crisis affecting every region of the world economy Chennai’s office market is fairly healthy. Because the city has such a varied economy, there is a diversified occupier base for its office market. However, the vacancy rate currently stands at almost 26 percent, but has been steadily decreasing. The outlook is good for the market, especially as recently restrictions have been loosened regarding the occupancy of IT projects by non-IT companies. Rent is likely to remain the same in the near future until the vacancy rate drops more significantly.
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