Office space leasing in Bengaluru surged by 15% in the April-June period, reaching 4.25 million square feet, driven largely by the IT-ITeS sector, which accounted for 69% of the city’s total demand, according to workplace solutions firm Vestian. The firm’s office market report, ‘The Connect Q2 2024’, highlighted that AI and robotics companies contributed 21% to Bengaluru’s office space absorption in this quarter.
Key Insights
Bengaluru’s strong performance in office leasing underscores the city’s role as a major tech hub. Despite global geopolitical challenges, India’s office markets demonstrated robust activity in Q2 2024. The demand for office space in Bengaluru rose to 4.25 million square feet from 3.70 million square feet in the same period last year. Knight Frank’s report also noted Bengaluru as the 18th most affordable prime office market in the APAC region, with prime office rent at Rs 137/sqft/month, showing a modest 1.3% YoY increase.
Sector Contributions and Comparisons
The IT-ITeS sector, including AI and robotics, dominated office leasing, reflecting the rapid global advancement in these fields. Across seven major cities, total office space leasing increased to 17.04 million square feet in Q2 2024 from 13.90 million square feet a year ago.
City Comparisons
- Chennai: Leasing declined 20% to 1.75 million square feet.
- Hyderabad: Office demand increased by 48% to 3.4 million square feet.
- Mumbai: Leasing rose sharply by 88% to 3.39 million square feet.
- Pune: Office leasing increased by 60% to 2.88 million square feet.
- Delhi-NCR: Demand declined by 43% to 1.14 million square feet.
- Kolkata: Leasing more than doubled to 0.23 million square feet.
Vestian’s report anticipates the demand for grade-A office spaces to remain robust, potentially crossing the 60-million-square-feet mark for 2024.