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Bengaluru Office Stock to Touch 330-340 mn sq ft by 2030, highest in India: CBRE-CII

Bengaluru, July 10, 2024: CBRE South Asia Pvt. Ltd, announced the findings of its joint report, ‘Karnataka Horizon: Navigating Real Estate Excellence in the South’. The report highlights Bengaluru office stock is expected to touch 330-340 million. sq. ft. by 2030, the highest in the country. The report also points out that with an average annual absorption of about 15-16 million sq. ft. over the past few years, Bengaluru has also been the front-runner in office absorption as compared with other Indian cities. Technology, engineering & manufacturing and BFSI sectors are expected to be the main demand drivers of office space while life sciences, aviation and automobile are likely to be the emerging sectors that would drive demand. 

Bengaluru has become India’s largest and most crucial office market, outpacing all other cities. The city boasts a more than two-fold increase in office stock, rising from 100 million sq. ft. in 2013 to over 223 million sq. ft. as of Jun’24, holding the highest share among the Indian cities. Total office stock in India as of Jun’24 stood at ~880.7 million sq. ft.  

City-wise office stock as of June’24 

The technology sector accounts for 30-35% of annual absorption in the city, primarily in the commercial hubs of ORR and Whitefield, the key growth areas with a high concentration of global corporations. Additionally, emerging locations in North Bengaluru are attracting significant interest due to improved infrastructure, ample land availability, and competitive rentals. Apart from technology, other sectors such as engineering & manufacturing, flexible space operators, and BFSI prominently contribute to Bengaluru’s commercial dynamism.

City leads in GCC leasing

The report also highlights that Bengaluru has cemented its status as the leader for global capability centres (GCCs), commanding a 41% share in India’s GCC leasing market (from 2022 to Jun’24). Bengaluru’s GCC growth is driven by a combination of factors, including a skilled talent pool, premium Grade-A assets, and a well-developed IT ecosystem. The city’s ease of doing business also contributes significantly, making it an attractive destination for GCCs. Additionally, the scope of scalability in both assets and talent resources further reinforces Bengaluru’s position as a leading commercial hub. In recent years, the city’s GCC landscape has diversified beyond its technology and BFSI roots, welcoming niche and specialised firms from retail, aerospace, and life sciences sectors, further solidifying its position as a multifaceted commercial hub.

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Office Outlook for 2030

Trends that are expected to drive office sector growth:

  • Flight to quality
  • Assets with sustainable features
  • Improved workplace design and amenities with focus on employee health and wellness
  • Technology, engineering & manufacturing, and BFSI sectors expected to drive the demand

                                                                       Future growth office locations

Micro-marketsFuture growth locations (near term*)Future growth locations (long term#)Existing and upcoming infrastructure
NBDYeshwantpura, Hennur, Nagawara Outer Ring Road Bellary Road, YelahankaMetro (Blue, Green Line), Airport, BBC
PBD-WWhitefield, Hope Farm, Graphite India RoadVarthur Road, Gunjur, KadugodiMetro (Purple line), BBC
PBD-OElectronic CityDevanahalli, KIADB Airport Road, Mysore Road, Kanakpura RoadMetro (Yellow, Blue Line), Airport, BBC

*near term – 2024-2027; #long term – 2028-2030

Bengaluru’s retail stock to touch 20-30 million sq. ft. by 2030

Bengaluru’s retail stock has more than doubled, from 7.2 million sq. ft. in 2013 to over 16 million sq. ft. as of Jun’24, currently holding the second-highest share among the top Indian cities. Bengaluru’s retail market is estimated increase to 20-30 million sq. ft. by 2030, representing a 1.4 times growth. Future retail demand drivers include fashion & apparel, entertainment, and food & beverage sectors. 

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Several factors have contributed to Bengaluru’s leading role in retail absorption over the past few years – the introduction of major malls, rising consumer brand awareness, increased disposable income, and a preference for organised retail experiences. This has resulted in an average annual absorption of 1.5-2 million sq. ft. in the city.

Bengaluru leads India in the number of Retail REIT (Real Estate Investment Trust) malls, housing three of the nation’s 17 listed malls. Absorption in the city is primarily driven by entertainment, fashion & apparel, and homeware & department stores, each accounting for about 20-30% of the annual demand, concentrated in prominent micro-markets across North and South Bengaluru. In recent years, there has been a significant increase in the entry of international and luxury brands, solidifying their presence across malls and high-street locations in the city. Total retail stock in India as of Jun’24 stood at 67.6 million sq. ft. 

          Retail stock city-wise as of Jun‘24

 

Bengaluru: A Vibrant High Street Destination

Bengaluru thrives with bustling high streets, offering a diverse mix of shops ranging from fashion and homeware to department stores and food & beverage outlets. Situated near major residential areas, these high streets have undergone a significant transformation in recent years. Once traditional markets, they have evolved into modern shopping destinations attracting both established national and international brands. This modernisation includes improvements such as enhanced parking facilities, increased store visibility, and engaging storefront designs, all contributing to a richer consumer experience.

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Trends that are expected to drive retail sector growth:

  • Enhanced retail experiences through improved design, entertainment concepts, technological upgrades, consumer engagement, space redistribution, and personalised services
  • Investment-grade assets with sustainable features
  • Fashion & apparel, entertainment, and F&B sectors expected to drive the demand

Future growth retail locations

Micro-marketsFuture growth locations (near term*)Future growth locations (long term#)Existing and upcoming infrastructure
NorthBellary road, YelahankaAirport Road, BagalurMetro (Blue Line), Airport
South- EastORR, MarathahalliSarjapur RoadMetro (Blue Line)
EastWhitefieldVarthur road, KadugodiMetro (Purple Line
West– Mysore Road, Rajarajeshwari NagarMetro (Purple Line

*near term – 2024-2027; #long term – 2028-2030

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE India, said, “Karnataka, a thriving state at the forefront of India’s growth trajectory, plays a pivotal role in the nation’s economic and social development. Over the last few years, the Government of Karnataka has introduced various industry-specific policies or renewed existing policies to encourage investments, increase employment, and strengthen the state’s real estate dynamics. 

Over the next few years Bengaluru is expected to grow extensively in the peripheral regions of the northern, eastern and southern catchments of the city across sectors. Coupled with the availability of large-sized land parcels and multiple upcoming infrastructure initiatives, the commercial sector is slated to expand significantly in the northern, eastern and southern parts.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “By 2030, Bengaluru is expected to have thriving commercial, residential, retail, and I&L sectors. The city is likely to capitalize on its existing strengths to attract investment in these growth areas. Bengaluru’s success is also expected to spill over to nearby Tier-II cities in Karnataka, aided by initiatives such as the ‘Beyond Bengaluru’ program.

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Karnataka’s vibrant tech infrastructure must continue to evolve to retain its edge. Developing premium, sustainable tech spaces with cutting-edge facilities will be key. Additionally, prioritizing employee experience strengthens state’s appeal for both skilled workers and global corporations seeking Indian GCC locations”.

Infrastructure initiatives in Bengaluru driving economic development

  • Easing traffic congestion: Bengaluru’s expanding network of operational and upcoming metro lines (purple, blue, yellow, and pink) would target key pressure points across the city. This includes Electronic City, Silk Board Junction, and the Outer Ring Road (ORR), improving connectivity and reducing traffic congestion.
  • Enhanced airport access: The upcoming airport metro line (blue line) would connect the critical commercial corridor along the ORR to the international airport, boosting development in the north (Hebbal-Bellary Road).
  • Improved regional connectivity: Expressways such as the Bengaluru Business Corridor (BBC) and Satellite Town Ring Road (STRR) would create a seamless loop around the city, improving connections to surrounding areas within and outside the state while diverting traffic away from the core.
  • Spurring development: The expanding metro network would not only ease commutes but also enhance accessibility and encourage commercial and residential development along its routes.

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