BENGALURU: Bengaluru registered an office transaction volume of 12.5 million square feet in 2023, the highest transaction volume recorded amongst the leading cities in India, according to a report by Knight Frank India released on Wednesday.
In its latest report titled ‘India Real Estate: Residential and Office (July-December 2023)’, Global Capability Centres (GCC), flex spaces and India-facing occupiers supported the office leasing momentum in Bengaluru while there was a moderation from the tech occupiers. During 2023, flex space occupiers and GCCs dominated the leasing activity in Bengaluru, each accounting for 30% of the total transactions in the city.
The growing occupier interest and the quality office space supply in Bengaluru have driven rentals upward in the market. The average transacted rentals in Bengaluru grew by 6.6% year-on-year (YoY) to Rs 86.4/sq ft/month in 2023, according to the report.
As per the report, in 2023, the Bengaluru market witnessed a new supply infusion of 13.4 mnsqft, leading to a stock accumulation of 215 mnsqft. The market contains an adequate inventory to fulfil occupier demands in the near future.
Shantanu Mazumder, Executive Director, Bengaluru, Knight Frank India, said, “The moderate leasing activity by third-party IT was positively cushioned by the market share consolidation by GCC, flex and India-facing businesses. Bengaluru is an attractive market for GCC occupiers as the city is already an established global hub, has a diverse talent pool and a unique ecosystem comprising technology penetration, research and development, start-ups, academia and more. Bengaluru’s office market fundamentals remain strong.
The acceleration of return-to-office by firms and the growth in India-facing businesses along with stable business inflow from the western developed markets into India should support the growth in the office market demand in the near term.”
According to the report, in 2023, Bengaluru registered a nine-year high sales volume of residential units at 54,046. The North Bengaluru micro-market is an emerging and one of the fastest-growing clusters in the city. In 2023, the micro-market witnessed 22% of sales, with a sharp rise in absolute volumes.
The city witnessed new launches of 51,126 units, a multi-year high, as the market experienced a strong influx of new project launches in 2023, indicating an 18% year-on-year increase. South Bengaluru micro-market continued to dominate sales comprising a share of 39% of the total sales in the city in 2023. The weighted average price of residential units in Bengaluru increased by 7% YoY to Rs 5,900/sq ft/month.