Chinese coolie began to be shipped to Sumatra in 1870 due to the rapid development of Colonial plantation activities, and many of them headed to Medan. The erection of temples in Medan area was the indication of rapid growth of Chinese population. In 1878 Zhenjun-miao was erected by Chaozhou people in Tanjung Mulia (between Titipapan & Labuhan) for their deity "the true man Wu". Around 1880s Guandi-miao was erected by Guangdong people the currently Jl. Irian Barat 2 location, followed by Guanyin-gong by Xinghua people in the present Jl. Yos Sudarso 46. Another temple, Guandi-gong was erected in the present Jl. Pertemburan 81 - near Pulo Brayan in 1890. These temples would be followed by the construction another temples in different locations in Medan area and beyond.
Few years after the establishment of tobacco plantation and factories, the city developed rapidly as a trading centre with a fast growing cosmpolitan population. Medan was declared as the capital of northern Sumatra in 1886. In the same year "Witte Societeit" ("a rather grand club") was erected next to the post office to cater the recreational need of the European community. Hotel De Boer was constructed in 1896, sign of rapid urban transformation process of Medan into a modern business city.
Tjong A Fie - a Hakka enterpreneur and one of the founding fathers of Medan - came from Canton in 1875 and made his fortune in the plantation industry together with his brother, Tjong Yong Hian. He built up good connection with the Sultan of Deli and the Dutch planters and was appointed as 'Majoor der Chineezen' or the Chinese community leader. He was a famous philanthropist which became one of the founders of the Colonial Institute (the present Koninklijk Instituut voor de Tropen or the Royal Tropical Institute in Amsterdam). His house in Kesawan was completed in 1900, a hybrid Chinese - European - Art Deco court-yard house. The design of this house is very similar to his relative's mansion in Penang, a more famous tycoon Cheong Fatt Tze. He initiated the opening of the railroad to connect Medan with the port of Belawan which later became "Deli Spoorweg Maatschappij" (Deli Railroad Company). In 1913 Tjong A Fie donated the bell tower for the old City Hall building.
The City Hall itself was constructed in 1908, designed by Hulswit & Fermont Weltevreden + Ed Cuypers Amsterdam. It was followed by the construction of the Post Office in 1909-1911, designed by Snuyf, head of the.Public Works Department. In 1910 the Javasche Bank (designed by Hulswit & Fermont Weltevreden + Ed Cuypers Amsterdam) was erected. In 1930s many corporate offices were established in Medan, most of them were located in Kesawan area. In 1929 Office of Netherlands Trading Company (it was then the liquidated Bank Exim) was completed (the building was used by Gunseikanbu during the Japanese occupation). Kesawan became the "Wall Street" of Medan - and the city was developed into an important regional trading and tourism in Southeast Asia.
Medan was closely linked with Penang across the Melaka Strait, not just in trading activities but also in urban design and architecture as well. British planners and architects from the Straits Settlements were often hired by the Medan wealthy residents, or the Dutch architects and planners brought in ideas from across the strait. The central open urban space at the middle of the colonial city was called "Esplanade" like the one in Penang, and the shop-house facade style and building typology bore a resemblance to the shop-house in the Straits Settlements. Fusion of Dutch-British Tropical style and urban design elements can be found almost everywhere in the Colonial district of Medan. The specifically design node and corner buildings in along the main streets of Kesawan area, which combined at least 2, 3 or more formal articulations of the building blocks (set-back, obliqued, rounded, towered) to give unique identity to different urban nodes, are similar to the urban design characteristics in other Dutch modern cities such as Bandung, Semarang, or Malang.