The rapid advancements in artificial intelligence (AI) have significantly boosted demand for office space in Bengaluru, according to a recent report by Vestian, a leading occupier-focused workplace solutions firm. The report reveals that AI and robotics companies alone represented 21 percent of the city’s office space absorption in the second quarter (Q2) of 2024.
Overall, the IT-ITeS sector, encompassing both AI and robotics, dominated Bengaluru’s office space absorption, accounting for 69 percent of the total uptake during Q2. This surge underscores the pivotal role of technological advancements in shaping real estate trends. Bengaluru emerged as the top contributor to pan-India office space absorption with a substantial 25 percent share in the second quarter. Hyderabad and Mumbai followed closely, each contributing 20 percent to the national absorption figures.
“Despite global geopolitical challenges, India’s office markets reported robust real estate activities during Q2 2024. The quarter has already set the tone for robust leasing and construction activities for the current calendar year,” said Shrinivas Rao, FRICS, CEO, Vestian.
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Among other cities, Pune exhibited remarkable growth, reporting a staggering 307 percent increase in office space absorption value terms for Q2. Conversely, Chennai experienced a significant decline, with absorption plummeting by 48 percent during the same period.
The report highlights a general upward trend in office space absorption across most cities, with the notable exceptions of Chennai and Delhi-NCR, where absorption decreased both quarter-on-quarter and year-on-year. The first half of 2024 saw a total absorption of over 30 million square feet, marking an 18 percent increase compared to the first half of 2023.
Bengaluru also led the field in new office space completions, capturing a 28 percent share, just ahead of Mumbai’s 27 percent. Southern cities, including Bengaluru, Chennai, and Hyderabad, accounted for a significant 57 percent of new office space completions reported in Q2 2024.
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