Tech Boom in Bengaluru: Driving Commercial Real Estate To the Top
Bengaluru, India’s Silicon Valley, has seen major advancement in its tech industry. This advancement has exponentially impacted the city’s commercial real estate market, pushing it to a growth trajectory unlike any other city has witnessed in India.
Unprecedented surge in accessible office area.
Bengaluru is projected to lead India in commercial real estate by 2030, with a significant 330-340 million square feet of office space. The growth of office space in Bengaluru has been off the charts. In June 2024, the city’s office space had grown to beyond the 223 million square feet mark, which was more than twice the 100 million square feet available in 2013. This increase shows a bigger trend occurring across India, with a total office space of 880.7 million square feet. Bengaluru holds a substantial 25% portion of the overall national total, underlining its key role in the country’s commercial real estate sector.
Factors influencing demand
The demand for office space in Bengaluru is being driven by multiple industries. The technology industry continues to be the main factor, making up 30-35% of the yearly office space uptake. The majority of this request is focused on the Outer Ring Road and Whitefield regions. Furthermore, the demand is also greatly influenced by the engineering, manufacturing, and BFSI sectors. New and growing industries like life sciences, aviation, and the automotive sector are also starting to establish themselves.
Expansion in Outlying Areas
In the future, Bengaluru’s outskirts are predicted to experience substantial expansion due to the presence of extensive land plots and upcoming infrastructure ventures. Significant development is expected in the northern, eastern, and southern sections of the city. This growth is ready to fulfill the increasing need for office space and bolster the city’s ongoing development as a business center.
Obstacles and Possibilities
In spite of the remarkable expansion, Bengaluru encounters numerous enduring obstacles. These factors consist of business-friendly processes, expensive land prices, and the importance of utilizing space effectively. The common practice of acquiring land through joint ventures may present upcoming obstacles, necessitating creative solutions to sustain growth momentum.
Retail Real Estate: An Equivalent Tale of Expansion
The effects of the tech boom are not limited to just office environments. The retail real estate market in Bengaluru has also seen substantial growth. By June 2024, the city’s retail space had increased by more than double, reaching over 16 million square feet, compared to 7.2 million square feet in 2013. Currently, Bengaluru has the second-largest portion of the retail market among major Indian cities, accounting for 24%.
Real Estate – The Present & Future.
The retail industry in Bengaluru is thriving, driven by various sectors such as entertainment, fashion, home goods, and large stores. Each of these categories accounts for about 20-30% of the annual demand. Typically, the city absorbs between 1.5 to 2 million square feet of retail space each year. Bengaluru stands out nationally for housing three of India’s 17 recognized malls, underscoring its vibrant retail landscape.
Looking ahead, Bengaluru’s retail sector is expected to expand significantly, reaching between 20 to 30 million square feet by 2030, marking a 1.4 times increase. This growth reflects the city’s robust economic strength and its emergence as a leading retail destination in India.
Bengaluru’s tech boom has sparked significant transformations in its commercial real estate landscape. The city is now leading India’s market in both office and retail sectors, navigating challenges while embracing new opportunities. This evolution showcases Bengaluru’s dynamic role in shaping the evolving relationship between technology and real estate.
