India’s office leasing market is growing rapidly. This growth is fueled by economic recovery, urbanization and the emergence of Global Capability Centers (GCCs). Cities such as Bengaluru, Hyderabad, Mumbai, Delhi-NCR, and Kolkata are spearheading the efforts. It is in these cities that the emerging office markets in India are experiencing a high demand for office space by local and international corporations. Let’s look at why each of these top cities is an emerging office market in India.

Bengaluru: The Tech Capital

Bengaluru is known as India’s tech capital. The city continues to lead in office leasing demand in India. Between January and June 2024, a total of 12.2 million square feet (msf) of office space was absorbed, which was an increase by 132% compared to last year. Bengaluru is home to a significant concentration of tech companies, startups, and GCCs. Nearly 47% of total leasing in the city came from GCCs, highlighting the importance of this sector.

Bengaluru attracts both startups and tech giants. It provides habitat for the young, that is, it makes it a good place for new businesses to grow. The city’s skilled workforce, supportive policies, and modern office spaces make it a strong player in India’s commercial real estate trends in India.

Also read: Why managed office spaces are fueling business growth in Bengaluru?

Hyderabad: The Rising Star

Hyderabad is rapidly becoming a preferred emerging office market in India – 5 msf of  office was signed in the city during the first half of 2024. The Hyderabad government has put money into the creation of infrastructure and a business supportive environment. This has drawn in as far as multinational corporations including ones in the IT-BPM industry.

Hyderabad’s skilled workforce and lower costs make it attractive for companies. The city is now a major competitor to Bengaluru. With the enhanced infrastructure, more and more companies are expected to set up their offices, thereby transforming Hyderabad into a prime emerging market for office structures.

Mumbai: The Financial Hub

Mumbai, India’s financial city, keeps a significant role in the office space trends in India. City leasing measurements reached 9.5 msf in the first six months of 2024, a 71% increase compared to the 2023 level. Mumbai is one of the international financial centers, where businesses from various industries, like finance, media, and even manufacturing, gather in the city.

Mumbai’s infrastructure is constantly improving. Due to further development schemes, companies locate Mumbai to be a suitable place for establishing offices. Although office spaces here are more expensive than in other cities, many companies are still drawn to Mumbai’s strong business ecosystem and opportunities.

Delhi-NCR: The Economic Powerhouse

The National Capital Region (NCR) Delhi is a very important emerging office market in India, which has been propelled by the urbanization process and the increased population. In the first half of 2024, Delhi-NCR accounted for around 20.7% of the country’s total leasing activity. With the growth of businesses, there is an increased office leasing demand in India.

Pressure is particularly acute in Information  Technology (IT) and Banking, Financial Services, and Insurance (BFSI) domains. With an increasing population and encouraging government initiatives, personal development in Delhi-NCR is playing a vital role as a leading center in commercial real estate trends. Employers appreciate the region’s access and infrastructure for business purposes.

Kolkata: Emerging Opportunities

Kolkata is gaining attention as an emerging office market in India. In recent times, the city has experienced significant growth in office leasing. Companies are taking Kolkata seriously again, especially due to the economic office space availability and the workforce skill level.

Kolkata boasts a strong culture and a burgeoning business ecology. This combination attracts both domestic and international companies. The city is taking steps to upgrade the infrastructure and business services of the city making it a new destination for office real estate in India.

Key Factors Driving Growth

Several factors are boosting India’s office leasing market. Let’s explore these factors to understand why the demand for office spaces is growing so quickly.

• Global Capability Centers (GCCs): Several foreign companies establish GCCs in India to take advantage of the skilled manpower available. All these centres offer cheap services such as IT, finance and customer service. GCCs are one of the main forces in the Indian office market providing a significant proportion of the letting scene.
• Post-Pandemic Recovery: Following the pandemic, the trend towards employers having physical offices resumes. It is pointed out that in the context of employee health and well-being high-class workspaces are in need. Companies are looking for space with modern infrastructures that are conducive to productivity and collaborative work.
• Flexible Workspace Solutions: Flexible workspaces (FWS) and co-working spaces (CwS) are impacting the traditional office market. The companies are often of the type that wants customisable, scalable solutions. This trend has led to a rise in demand for shared office spaces.
• Infrastructure Development: Improved infrastructure, like better roads and public transportation, makes cities more attractive for businesses. Municipalities investing in infrastructure attract a greater number of companies, because they provide easier access and more facilities.
• Cost Efficiency: Cities like Hyderabad, Pune, and Kolkata offer lower office rents than Mumbai or Delhi. Companies can save money by establishing offices in these cities. It is attractive to companies, including, but not limited to, startups and midsize enterprises.

Suggested read: Impact of Infrastructure on Real Estate in Bengaluru

India’s office leasing demand is booming. Cities like Bengaluru, Hyderabad, Mumbai, Delhi-NCR, and Kolkata are at the forefront. Every city brings something special, of which lower costs as well as a competent workforce are only two examples. Office space demand continues to surge with increasing investments in India by companies.

For businesses who want to create the right setting for offices, a flexible, supportive workspace provider plays a key role. BHIVE Workspace provides contemporary, reasonably priced office spaces in India’s key markets. With BHive, companies can discover the entire workplace that enhances productivity and fuels expansion. Investigate BHIVE in order to find out how they can accommodate your business requirements through their workspaces.