AI Companies in Bengaluru
Rapid global advancement of artificial intelligence, combined with a supportive ecosystem, has significantly driven the demand for office space in Bengaluru, with the overall, IT-ITeS sector, including AI & Robotics, accounting for 69 percent of the city’s absorption in Q2 2024.
According to a recent report by Vestian, Bengaluru contributed the highest to pan-India absorption with 25 percent share in Q2 2024, followed by Hyderabad and Mumbai at 20 percent each. Pune reported the highest quarterly growth, around 307 percent, in value terms whereas absorption declined by 48 percent in Chennai during Q2 2024. NCR also witnessed a quarterly decline of 37 percent during the above-mentioned period. All the cities except Chennai and NCR reported an increase in absorption in quarter and year.
Absorption:
IT-ITeS sector dominated absorption with a 38 percent share in Q2 2024, followed by BFSI and Consulting Services at 12 percent and 10 percent respectively. Flex Spaces accounted for 8 percent of the total absorption during the current quarter.
H1 2024 witnessed absorption of over 30 million sq ft, registering an uptick of 18 percent compared to H1 2023. As the demand for grade-A office spaces is robust across the top seven cities of India, the entire year (2024) is expected to cross the 60 Mn sq ft mark again after peaking in 2023.
Absorption reached 17.04 Mn sq ft in Q2 2024, registering an increase of 27 percent over the previous quarter and 23 percent over the same quarter a year earlier. The surge could be attributed to the improved global macroeconomic scenario and India’s robust growth amid global geopolitical challenges.
Following a similar trend, new completions also increased by 17 percent in H1 2024 over H1 2023, reaching 23.2 million sq ft. Additionally, Q2 2024 witnessed a quarterly increase of 15 percent and a yearly rise of 10 percent in new completions. All the cities except Pune and Bengaluru witnessed an uptick in construction activities during the current quarter compared to the previous quarter. Moreover, Mumbai reported 3.3 million sq ft of new completions during Q2 2024, registering the highest quarterly rise of 230 percent.
Bengaluru dominated new completions with 28 percent share, closely followed by Mumbai with 27 percent. Southern cities (Bengaluru, Chennai, and Hyderabad) accounted for 57 percent of the total new completions reported in Q2 2024, however, the share has dropped from 63 percent a quarter earlier.
New Completions:
Shrinivas Rao, CEO, of Vestian, is upbeat about the office market prospects. “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. Going forward, real estate activities are anticipated to increase further on the back of strengthened demand from the IT-ITeS and BFSI sectors. Flex Spaces are also likely to play a pivotal role in the growth of office markets in India.”
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