Bengaluru continues to reinforce its position as India’s leading hub for office space demand, a trend strongly reflected in the latest report by real estate consultant Knight Frank India. The report highlights that 55% of the total office space transactions across the top eight cities during the first half of 2024 were for spaces up to one lakh square feet, demonstrating robust demand from smaller companies, startups, and third-party service providers. This shift toward more flexible and mid-sized workspaces reflects the evolving needs of businesses, particularly those in sectors like IT services, which have a strong foothold in Bengaluru.
The total office space leased in the sub-1 lakh square feet category stood at 11.7 million square feet from January to June 2024, underscoring the growing preference for smaller, adaptable spaces. Startups, which thrive in Bengaluru’s vibrant innovation ecosystem, and small businesses are the primary drivers of this demand. Flexible workspaces have emerged as a vital segment in the commercial real estate market, offering companies the ability to scale operations efficiently while minimising costs.
For these companies, especially those in their growth phases, flexible offices provide the infrastructure they need without long-term commitments.
However, it’s not just smaller businesses that are driving Bengaluru’s office space demand. The data also showed that larger office spaces accounted for 45% of the total leasing transactions across the eight cities. During this period, 15.69 million square feet of large office spaces were leased, indicating that major corporations and multinational companies are continuing to invest in expansive workspaces. Much of this demand is attributed to Global Capability Centres (GCCs), established by multinational corporations to manage a wide range of operations, including IT, customer support, and R&D, for global markets.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasised that Bengaluru remains the most attractive market for large occupiers, particularly for those looking to establish or expand their GCCs. “Bengaluru is leading the charge in office space demand, largely due to the rise of GCCs, which are playing a pivotal role in shaping the office market landscape,” he said. Baijal also pointed out that GCCs have been instrumental in driving up demand for large office spaces as these corporations seek to set up long-term operations in India, leveraging the city’s talented workforce and strong infrastructure.
A realtor said, “The city’s ability to attract and retain multinational corporations is rooted in its well-established ecosystem of technology and innovation, supported by a large pool of skilled professionals. Bengaluru has long been regarded as the Silicon Valley of India, with many global tech giants operating their largest Indian offices in the city. The rise in office space transactions signals that corporations view Bengaluru as a key strategic location for their global operations, particularly in the post-pandemic world, where hybrid work models and an increased reliance on technology have reshaped business needs. The flexibility to expand or contract workspaces based on immediate needs is an attractive proposition for companies navigating market uncertainties or scaling rapidly.” Another expert said that this trend is being driven by sustained interest from international and domestic occupiers who are looking for strategic locations.
“The sustained demand for office spaces in Bengaluru is expected to continue, supported by the city’s growing prominence as a global hub for innovation and technology. The city’s ability to cater to the needs of both startups and global corporations alike ensures that it will remain a key player in India’s commercial real estate sector,” the report added.
Article Original Source: BANGALORE MIRROR
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