Bengaluru to witness the strongest quarter at approx. 3.5- 4 million sq. ft during Q4, 2021

Bengaluru, 29 November 2021: The leasing market in Bengaluru is set to witness a strong revival with absorption by end of 2021 set to touch approximately 10 million sq ft. This is close to 2017-2018 absorption levels for the city. In the last two months (September-October) the city has seen closure of approximately 3 million sq. ft, highest in 2021. Bengaluru continues to dominate with the highest leasing activity in the country with overall absorption of ~7.2 million sq. feet year to date.

The reasons for the same are very evident. A strong supply pipeline, flexible deal structuring, return to work along with strong revival in market sentiment, and will continue to strengthen momentum of office leasing space in the city. The city with a total workforce of ~3 million sq. ft is expected witness a return of ~1 million employees phased return to office by first half of 2022.

“An increased activity from Start-ups in the city has been observed and these businesses are driving the demand for agile workspaces. Out of the 73 unicorns in India, 33 have been founded in and are headquartered in the city. Most of them have expanded or optimized their real estate footprint in the city as employees return to offices in a phased manner,” said Rahul Arora, Managing Director - Bengaluru & Head - Office Leasing Advisory, India, JLL.

Outer Ring road continued to witness the highest absorption in the city of approximately 2.8 million sq. ft out of the 7.2 million sq. ft. Close to 7,000 seats have been leased out of the 17,000 seats. Managed office players continue to be significant absorbers of space, witnessed an absorption of ~1 million sq. feet. Peripheral markets like Whitefield, Hosur Road & Electronic City witnessing renewed interest owing to metro lines nearing completion, improved support infrastructure & lower top line rentals.

Leasing momentum continues to strengthen with several new Request for Proposals (RFPs) at all-time high of 12 million sq. ft across various micro markets which is expected to put pressure on rentals in the next 3-4 quarters. Occupiers continue to explore renewal of existing leases by offering lock-in periods, given the confidence of return to office.