WFH waning? Bengaluru tops demand for office space

Companies in Bengaluru and Hyderabad are bringing employees back to offices post-pandemic, with high demand for Grade A office spaces.

“We were working from home since the COVID 19 pandemic. Since the beginning of this year, we have been asked to go to office twice a week,” said Sandhya Shetty, an employee of a media company in east Bengaluru.

Signalling this increasing shift, many companies are working towards bringing employees back to office post the pandemic. Bengaluru, along with Hyderabad, accounted for over half of the leasing activity in the first three quarters of 2024, wherein Grade A office space demand went up to 46.7 million sq ft across the top six cities of India (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune).

According to Colliers, a multinational real estate services company, building on the momentum in the first half of the year, Q3 2024 saw space take-up to the tune of 17.3 million sq ft, a 31% year-over-year (YoY) growth. “Bengaluru registered its highest ever leasing in any quarter at 6.3 million sq ft, continuing its dominance in the office market,” the company said.“

“Office demand across different markets and sectors has been impressive in the last two to three years, aiding overall leasing reach new highs each passing year. Interestingly, 2024 saw consecutive quarters of high growth in demand and supply. Office space demand in Bengaluru, Hyderabad and Mumbai have reached close to or surpassed 2023 demand levels in the first three quarters of 2024,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.

He added that occupier confidence is reflected in continued higher uptake of large-size deals of more than 1 lakh sq ft, accounting for 65% of total leasing in Q3 2024. Bengaluru saw 81% of its leasing through large-sized deals.

The technology sector drove around one-fourth of the overall office space demand during the quarter, followed by Banking, Financial Services and Insurance (BFSI) occupiers, and Flex space operators (co-working spaces).

Bengaluru and Pune surpassed Mumbai in BFSI leasing.