Bengaluru’s office absorption in the April-June quarter of 2024 was led by the IT/ITes sector, including a 21% share by AI and robotics companies, according to a report released by property consultancy Vestian on July 30.
โRapid global advancement of artificial intelligence, combined with a supportive ecosystem, has significantly driven the demand for office space in the city,โ the report noted.
Overall, the IT-ITeS sector, including AI and robotics, accounted for 69% of the cityโs absorption in Q2 2024, per the report.
According to the report, Bengaluru accounted for the highest office absorption pan India in the June quarter with a 25% share, followed by Mumbai and Hyderabad at 20% each.
Also Read: Bengaluru to dominate India’s commercial real estate market with 330-340 mn sq feet office stock by 2030: Report
Remarkably, Pune saw the highest growth during the quarter with a 307% increase in value terms, as per the report. Meanwhile Chennai reported a 48% decline in absorption during the period under review.
Besides Chennai, Delhi-NCR emerged as the only major city with a quarterly and annual decline in absorption (37%) during the three-month period.
Absorption reached 17.04 mn sq ft in Q2 2024, registering an increase of 27% over the previous quarter and 23% over the same quarter a year earlier, the report cited.
Also Read: Office leasing across top 9 cities touches 32.8 mn sq ft in Jan-June; Bengaluru leads office leasing at 8.5 mn sq ft
โReal 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,โ said Shrinivas Rao, FRICS, CEO, Vestian.
CY 2024 expected to cross 60 mn sq ft- mark
Sectorally, the IT-ITeS sector dominated absorption across the top seven cities with a 38% share in Q2 2024, followed by BFSI and consulting services at 12% and 10% respectively.
Overall, the first half of the year recorded absorption to the tune of 30 million square feet, registering an annual uptick of 18%, per the report.
โAs 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 mn sq ft mark again after peaking in 2023,โ the report said.
Also Read: Bengaluru leads office space absorption by global capability centers in India at 4.3 mn sq ft: Report
According to the report, new completions during the half-yearly period increased 17% year-on-year reaching 23.2 mn sq ft.
Mumbai reported 3.3 mn sq ft of new completions during Q2 2024, registering the highest quarterly rise of 230%. Bengaluru dominated new completions with a 28% share, closely followed by Mumbai with 27%.
The southern cities of Bengaluru, Chennai and Hyderabad collectively accounted for 57% of the total new completions reported in Q2 2024, however, the share has dropped from 63% a quarter earlier, the report pointed out.
