Office space leasing in Bengaluru rose 15 per cent in the April-June period to 4.25 million square feet, driven by the IT-ITeS sector that accounted for 69 per cent of the total demand in the city, according to workplace solutions firm Vestian.
In its office market report, ‘The Connect Q2 2024’, Vestian highlighted that AI (artificial intelligence) and robotics companies accounted for 21 per cent of Bengaluru’s absorption in the second quarter of this calendar year.
Rapid global advancement of artificial intelligence, combined with a supportive ecosystem, has significantly driven the demand for office space in the city, it said.
Bengaluru saw the leasing of 4.25 million square feet of office space during April-June this year, as against 3.70 million square feet in the year-ago period.
According to another report by Knight Frank, Bengaluru ranks 18th and is among the most affordable prime office markets in the APAC region. The prime office rent in the city was recorded at Rs 137/sqft/month, with a marginal YoY increase of approximately 1.3%.
Key Findings of The Vestian Report
Overall, the IT-ITeS sector, including AI & Robotics, accounted for 69 per cent of the total leasing in April-June this year.
Across seven major cities, the total leasing or absorption of office space stood at 17.04 million square feet during the April-June period from 13.90 million square feet a year ago.
“Despite global geopolitical challenges, India’s office markets reported robust real estate activities during Q2 2024. Real estate activities are anticipated to increase further on the back of strengthened demand from IT-ITeS and BFSI sectors. Flex Spaces are also likely to play a pivotal role in the growth of office markets in India,” said Shrinivas Rao, CEO, Vestian.
As per the data, office leasing in Chennai declined 20 per cent to 1.75 million square feet during April-June 2024 from 2.20 million square feet in the corresponding period of the previous year.
Hyderabad saw a 48 per cent increase in office demand to 3.4 million square feet, from 2.30 million square feet.
The office demand in Mumbai rose sharply by 88 per cent to 3.39 million square feet, from 1.8 million square feet.
Pune witnessed a 60 per cent increase in office leasing to 2.88 million square feet, from 1.8 million square feet.
In Delhi-NCR, the demand declined 43 per cent to 1.14 million square feet, from 2 million square feet.
Office leasing in Kolkata more than doubled to 0.23 million square feet in April-June this year, from 0.1 million square feet in the year-ago period.
Vestian said that the office demand in the January-June period has crossed 30 million square feet, registering an uptick of 18 per cent compared to H1 2023.
“As the demand for grade-A office spaces is robust across the top seven cities of India, the entire year (2024) is expected to cross the 60-million-square-feet mark again after peaking in 2023,” the consultant said.
Vestian is an occupier-focused workplace solutions firm specialising in commercial, residential, industrial, retail and hospitality sectors. Headquartered at Chicago, Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East.
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