City leads in office space leasing with 7 mn sq.ft: Knight Frank Premium

Corporates in Bengaluru seem to be scaling up office space in anticipation of letting more of their employees work from office. Consequently, the city’s office space leasing transactions in the first half of calendar 2023 was highest across top eight cities in the country at 7 million sq.ft, against 6.4 million Sq.ft in the corresponding period a year ago, reported realty advisory firm Knight Frank India on Tuesday.

Corporates in Bengaluru seem to be scaling up office space in anticipation of letting more of their employees work from office.

Consequently, the city’s office space leasing transactions in the first half of calendar 2023 was highest across top eight cities in the country at 7 million sq.ft, against 6.4 million Sq.ft in the corresponding period a year ago, reported realty advisory firm Knight Frank India on Tuesday.

The city accounted for 27% of the total 26.1 mn sq.ft transacted across NCR, Chennai, Mumbai, Hyderabad, Pune, Kolkata and Ahmedabad.

Bengaluru’s office sector remained buoyant during H1 2023, despite facing multiple headwinds such as volatility in the IT/ITeS sector, continuation in work-from-home policies and the funding crunch for startups, said Knight Frank.

According to the realty advisory firm, GCCs (global capability centres) and co-working occupiers drove the demand for office space during H1 2023, thus, balancing the slowdown arising from the IT/ITeS sector.

The demand for flex spaces was growing as companies, especially in the volatile IT/ITeS and start-up ecosystem, were opting to operate from co-working and managed offices as a revenue saving mechanism. In fact, sectoraly, the City’s commercial market leasing volume was largely dominated by flex working spaces (41%), Global Capacity Centres at (29%) and India facing and third-party IT services accounted for 15% each. Flex occupier leasing volume accounted to 2.9 million square feet during H1 2023, the highest level in the last ten half-yearly periods.

Although Bengaluru’s office market has been predominantly led by third party IT services, GCCs also held the potential to be significant drivers of the market, the study found.