With IT companies calling employees back to office, demand for Bengaluru office space to go up
The report said Bengaluru, Hyderabad and Chennai contributed 58% to total office leasing and 70% to new supply during Q3 of this calendar year.
BENGALURU: With IT companies calling their employees back to office, the office market in Bengaluru will increase in coming months.
The country’s largest IT services company Tata Consultancy Services (TCS) has made it mandatory for its employees to work from the office five days a week. Infosys and Wipro have asked their employees to work from the office thrice a week.
Real estate consultant Vestian released its office market report for Q3 2023 on Monday which shows 21% growth in office leasing and 26% increase in new supply across top seven cities- Bengaluru, Hyderabad, Chennai, Mumbai, Pune, Delhi-NCR and Kolkata.
The report said Bengaluru, Hyderabad and Chennai contributed 58% to total office leasing and 70% to new supply during Q3 of this calendar year. As per the data, the absorption of office space in the July-September period rose 21% year-on-year to 15.9 million sq ft across seven major cities. Shrinivas Rao, CEO, Vestian, said,
“In Q3 2023, the Indian office sector witnessed heightened real estate activities as absorption reached the highest level since pandemic and new completions increased to a five-quarter high.” The sector also reported healthy vacancy levels with an appreciation in average rentals, Rao said.
CRISIL Ratings pointed out that the country’s commercial office space is dominated by technology companies, with information technology (IT) and IT-enabled services (ITeS) companies occupying 42-45% of the operational stock.
“Global capability centres (GCCs) of multinational corporations have also emerged as a key category of tenants in the past few years, occupying around a third of the total stock. These two determinants will keep demand modest in the near term amid global economic headwinds,” it said.