AI, Robotics Firms Drive Office Space Absorption in Bengaluru in Q2: Report
The rapid global advancement in Artificial Intelligence has fast-tracked demand for office space in Bengaluru, with AI and robotics companies accounting for 21 per cent of the city's absorption in the April-June quarter, according to a report.
AI and robotics - part of the IT-ITeS sector - accounted for 69 per cent of Bengaluru's office space absorption in Q2 2024, according to occupier-focused workplace solutions firm Vestian. The contribution of Bengaluru was at 25 per cent to the country's office space absorption, followed by 20 per cent each by Hyderabad and Mumbai.
"Despite global geopolitical headwinds, India's office markets clocked strong real estate activities in Q2 2024. The quarter already sets a tone for robust leasing and construction activities for the current calendar year", said Shrinivas Rao, FRICS, CEO, Vestian. He further mentioned that flex spaces are likely to drive an important role in the growth of office markets across India.
While Pune recorded the maximum growth in value terms, at approximately 307 percent, Chennai witnessed a 48 percent drop in absorption during Q2 2024. The report stated that most cities, barring Chennai and Delhi-NCR, witnessed an increase in absorption both quarterly and annual.
With more than 30 million square feet of office space absorbed, the first half of 2024 saw an 18 percent increase over H1 2023. Bengaluru led the new completions, at 28 percent; closely at its heels was Mumbai, with 27 percent. The southern cities Bengaluru, Chennai, and Hyderabad accounted for 57 percent of all new completions in Q2 2024.
According to Rao, "The real estate activities are expected to rise further on the back of strengthened demand from the IT-ITeS and BFSI sectors".
It is simply the strong performance underlining Bengaluru's status as the leading national office space market, powered by the rapid growth of AI and robotics sectors.