By 2025, Bengaluru’s office supply is expected to reach 39 million square feet, with outer ring road or ORR (North and South) contributing 11 m sq ft (33 per cent), making it India’s largest office market according to Property Share and JLL.

The city has seven micro-markets, with ORR dominating at 43 per cent, followed by Whitefield (24 per cent), SBD South (7 per cent), Electronic City (5 per cent), CBD (4 per cent), SBD North (4 per cent) and Peripheral North (3 per cent).

Impact on vacancies

The majority of the supply is institutional, centred around large tech parks. Post-Covid , demand softened due to MNC expansion delays, impacting vacancies that rose from 1 per cent to 6 per cent, still half of Bengaluru’s 12 per cent overall vacancy.

Currently, ORR – North holds 17 m sq ft , with 83 per cent in Manyata Tech Park (mostly Embassy REIT-owned). Annual rent increases since 2018 slowed due to increased vacancies from 0 per cent to 14 per cent, driven by new supply and occupier consolidations post-pandemic.

Whitefield evolved into a key IT corridor in the early 2000s, fueled by land availability, SEZ policies and robust infrastructure. Recent supply additions led to a 15 per cent vacancy, but lower rents, metro connectivity since September 23 and limited future supply are expected to boost demand and increase rentals.

SBD – South is primarily residential and retail, with limited tech parks. Increasing vacancies result from poor connectivity and a lack of an office ecosystem, hindering rental growth.

In terms of the overall rent appreciation, cities such as Bengaluru has enjoyed rent growths of 5-6 per cent annually since 2016. However, given the global sentiments and increased vacancy levels, the rent growths in 2024 will be more muted at around 3-4 per cent.

Further, “In the broader real estate sector, retail has surged in the past 1.5 years and warehousing is thriving with anticipated growth,” said Kunal Moktan, Co-founder and CEO, Property Share. 

Property Share and JLL collaborated to analyse office supply trends in major Indian cities: Hyderabad, Bengaluru, Mumbai and Pune, providing valuable insights into the market dynamics.

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