The Banking, Financial Services, and Insurance (BFSI) sector has witnessed an increase in demand for office spaces, emerging as the second-largest occupier in India, following the IT/ITeS sector. Until the third quarter of 2024, office leasing in the BFSI sector accounted for 16.4% of the 53.4 million sq ft total gross leasing, across the country’s top seven cities that include Mumbai, Delhi NCR, Kolkata, Bengaluru, Chennai, Hyderabad and Pune.
According to a report by JLL, Mumbai, Bengaluru and Hyderabad account for over 50% of the total space leased by the BFSI sector in the country, while Delhi NCR also makes its presence felt with 18% share of domestic and 17% share of international BFSI companies’ leasing space.
According to JLL India, the sector is on a robust growth trajectory, driven by rapid technological advancements, talent availability and evolving market dynamics. The sector’s share in office leasing has increased from an average of approximately 11% in the 2017-2019 period to 17-18% over the last few years.
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Global players have been at the forefront of this expansion, dominating over 65% of the BFSI sectorโs activity in India. On average, these international entities have accounted for two-thirds of all office space leased by the sector over the past six years, the report showed.
Mumbai leads the pack, accounting for approximately 44% of the total space occupied by domestic financial organisations. Bengaluru is seen as the preferred hub for foreign organisations with a 30% share, reflecting its tech ecosystem that attracts top talent and financial services organisations from across the globe.
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“The country’s fintech market, currently valued at $584 billion, is projected to reach approximately $1.5 trillion by 2025. This expansion is reflected in the increasing presence of global capability centres (GCCs) across India. The BFSI industry already accounts for a substantial 20% share of these GCCs. With over 1,900 GCCs offering end-to-end services, India is poised for further growth in this sector, driving continued demand for office spaces.” said Rahul Arora, Head – Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.
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“The BFSI sector is spearheading India’s economic growth, driving innovation and digital transformation. As the sector evolves, we anticipate continued robust demand for office spaces that can support innovation, attract top talent, and meet evolving consumer demand. The overall BFSI segment leased over 11 mn sq ft in 2023, the highest ever and is on track to surpass that number in 2024,โ said Samantak Das, Chief Economist and Head โ Research and REIS, India, JLL.
โWe are already seeing that the tech cities of Bengaluru, Hyderabad, Chennai and Pune account for over 80% of all BFSI GCCsโ demand while domestic BFSI demand is driven by Mumbai and Delhi NCR which together account for around 65% share. The sector’s dynamic needs present significant opportunities for the real estate industry to create sophisticated, technology-enabled workspaces that cater to the unique requirements of financial institutions,” he said.
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