Bangalore and Hyderabad drive India's office space growth to 165 million sq ft

The total office space supply across the top seven cities in India is expected to surpass 165 million square feet between 2023 and 2025, compared to the 142 million square feet recorded during the 2020-2022 period, according to CBRE. Notably, Bangalore and Hyderabad are set to play a pivotal role in this growth, collectively accounting for nearly half of the upcoming office space supply between 2023 and 2025.

Citywise workspace shares

In a city-wise breakdown of India's upcoming office space supply, Bangalore takes the lead, contributing 29 per cent of the total, with new developments concentrated in the Outer Ring Road and North Business District. Hyderabad follows closely, accounting for 20 per cent of the supply, primarily in the IT Corridor II and Extended IT Corridor. Delhi-NCR is expected to represent 17 per cent of the supply, with key areas along the Expressway and Golf Course Road extension. Pune will supply 12 per cent of the new office space, focusing on the Peripheral Business District NE and South Business District NW. Chennai offers 11 per cent of the supply, primarily in OMR Zone 2 and MP Road, while Mumbai's contribution stands at 9 per cent, with new office space concentrated in the Navi Mumbai Business District and EX Business District. Kolkata provides 2 per cent of the office space supply, primarily in the Peripheral Business District and South Business District.

Indian office space to surpass 165 million sq ft by 2025 | Image credit: Pexels

Anshuman Magazine, Chairperson & CEO, CBRE, noted that the office sector in India is on a growth trajectory. The average annual office supply has increased by 17 per cent, and average building size by 18 per cent over the past three years, with the expectation of a 15 to 18 per cent acceleration between 2023 and 2025. This growth is driven by rising occupier demand and developers' expansion plans, with the country maintaining its allure for global corporates.

Ram Chandnani, Managing Director of Advisory & Transactions Services, CBRE India, emphasised India's appeal to North American and European investors, with a 80 per cent year-on-year increase in foreign investment to $2.8 billion in 2022.

Robust IT expenditure

Despite prevailing economic conditions, IT expenditure in India is projected to remain robust in 2023, driven by continued corporate focus on enhancing productivity and customer experiences. Key sectors such as BFSI, technology, and pharmaceuticals have played a pivotal role in the demand for office space, accounting for approximately 50 per cent of leasing activity in Jan-Sep 2023.

The report also highlights a positive trend in hiring, with a significant increase in jobs in 2022. It foresees an 11 per cent increase in the annual employment rate for office-going professionals in the six major cities in 2023, reflecting a promising job market outlook and increased demand for talent.