An influx of office spaces is anticipated to redefine the Indian business landscape between 2023 and 2025, with major cities taking the lead in transforming the way businesses operate. According to a recent report by CBRE South Asia, a renowned real estate consulting firm, the anticipated office supply completions across India’s top seven cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, and Pune—are projected to exceed 165 million square feet during this period. This remarkable increase marks a significant upturn from the 142 million square feet recorded during 2020-2022.
Bengaluru is poised to lead this transformation, accounting for a substantial 29% of the total office space supply in India. This vibrant city, often referred to as the Silicon Valley of India, is renowned for its thriving tech industry and business-friendly environment. Its considerable share in the upcoming office space supply signifies a promising future for the city.
In Bengaluru, the Outer Ring Road and North Business District area are set to witness a surge in new office development completions. These strategic areas are well-prepared to meet the increasing demand for contemporary office spaces.
Hyderabad’s Thriving Tech Hub
Hyderabad, with a 20% share, is not far behind Bengaluru. It continues to attract businesses and investors with its thriving Information Technology sector. In Hyderabad, the IT Corridor II and Extended IT Corridor are the key areas set to see the majority of new office completions, reflecting the city’s commitment to fostering technological innovation and business expansion.
Delhi-NCR’s Strategic Growth
Delhi-NCR, holding a 17% share, reaffirms its status as a vital business hub in India. The region’s expansion is influenced by factors such as significant infrastructure development and its strategic location. Notably, the Expressway and Golf Course Road extension in Delhi-NCR will see a substantial increase in new office space completions, transforming the region into a thriving business district.
Pune, with a 12% share, is making significant strides in the office space supply market. Known for its educational and IT hubs, the city’s growth is consistent with India’s broader development trends. The city will focus its new office space completions primarily on the Peripheral Business District NE and South Business District NW, underlining its commitment to business expansion and development.
Chennai’s Economic Diversity
Chennai’s 11% share highlights its growing importance in India’s business landscape. The city’s economic diversity and strategic location continue to attract investors and businesses. In Chennai, upcoming office supply will primarily focus on OMR Zone 2 and MP Road, areas well-positioned for business growth.
Mumbai’s Financial Impact
Mumbai, with its 9% share, remains a significant contributor to India’s office space supply. The city’s financial prowess and vibrant business community ensure its continued growth. In Mumbai, new office supply will primarily be concentrated in the Navi Mumbai Business District and EX Business District, indicating a vibrant and diverse business ecosystem.
Kolkata’s Unique Contribution
Kolkata, with a 2% share, represents a unique facet of India’s office space supply landscape. The city’s cultural richness combines with a burgeoning business scene. In Kolkata, new office supply will primarily revolve around the Peripheral Business District and South Business District, areas poised for balanced growth.
Investment and Demand Trends
Despite prevailing economic conditions, India remains an attractive destination for foreign investors. Foreign investment in India increased by a substantial 80% year-on-year to reach USD 2.8 billion in 2022, making it the only market in the entire APAC region to witness annual growth in capital deployment. This investment surge is propelled by India’s strong IT sector, where corporations focus on enhancing productivity, customer experiences, and operational efficiency. The demand for office space is primarily driven by the BFSI, technology, and pharmaceutical sectors, which collectively account for approximately 50% of leasing activity in Jan-Sep 2023.
The period between 2023 and 2025 is poised to reshape India’s business landscape with a surge in office space supply. Major cities like Bengaluru, Hyderabad, and others are at the forefront of this transformation, promising an exciting future for businesses and investors. This report offers a detailed analysis of each city’s contribution to the forthcoming office space supply, providing valuable insights for industry professionals and stakeholders navigating India’s dynamic real estate market.