Bengaluru takes the lead in office realty sales in first half of 2024
Bengaluru: While the country recorded its highest ever volume in office realty sales in the first half of this calendar year pushing through 8.4 million square feet (msf), Bengaluru has yielded 26 per cent of that marking its leadership in the market, according to the ‘India Real Estate: Office and Residential Market (H1 2024)’ - a report tabled by Knight Frank India on Thursday.
The report looked at the real estate market across eight cities between January and June this year. It found the market size between these cities to be 34.7 msf, in this period, reflecting an overall growth of 33 per cent year-on-year (YoY). Of this the office market recorded a 39 per cent YoY jump at 25.1 msf, while the residential market picked up by 11 per cent YoY selling over 1.73 lakh units, which interestingly, is a 11-year high in terms of growth.
Bengaluru which took the lead in office space sales saw a 21 per cent YoY growth in this first half of the year. The report attributed this surge to the establishment of global capability centres (GCC) by overseas corporations looking to expand long-term operations in the market. In fact, the city witnessed the highest GCC focused transactions at 4 msf.
Shantanu Mazumder, executive director, Bengaluru, Knight Frank India observed, “Market dynamics have shifted with GCCs and flexible workspaces playing significant roles, reaffirming Bengaluru as a prime destination for commercial real estate. This is bolstered by the city’s infrastructure developments and strategic importance for global businesses.”
His colleague, Viral Desai, senior executive director, occupier strategy and solutions, industrial and logistics, capital markets and retail agency, added, “India has consistently maintained its status as one of the fastest-growing large economies which has positively impacted the office demand. Sustained occupier demand since 2022 has led to record-high transaction volumes in both the second half of 2023 and the first half of 2024.”
Interestingly another realty report put out by the consulting firm CBRE South Asia Pvt Ltd - ‘CBRE India Office Figures Q2 2024’ - also estimated office space leasing in Bengaluru at 8.5 msf in the H1, 2024, as against 6.9 msf in the corresponding period in 2023. However, it saw this performance being driven more by small-sized (less than 50,000 square feet) deals between April and June, this year.
On the residential market side, Bengaluru comes up third after Mumbai and the National Capital Region (NCR). This segment witnessed a 4 per cent YoY rise in the city in H1, 2024, selling 27,404 housing units.Launches in the city recorded a growth of 9 per cent YoY H1 2024 as well, while the weighted average price of residential units in Bengaluru increased by 9 per cent YoY.