startups offices: Startups’ office leasing remains robust, to account for one-third of activity in 2022
With over 6.97 million sq ft office space leased to start-ups in the first half of 2022, the industry is pegged to be one of the top office occupiers in the coming years. This year, the segment is estimated to account for nearly 30% of gross office leasing activity, showed a JLL India analysis.
With over 82,000 organizations, India is the world’s third largest start-up ecosystem and the sector has witnessed an expansion in gross leasing with its share growing from17% in 2021 to an impressive 28% in the first half of the year.
Even in terms of taking up flexible office space, which works well for their agile working styles, start-ups have been one of the biggest movers among all firms.
“India has emerged as the largest ecosystem for start-ups in the world with over two to three new start-ups being conceived each day. A greater emphasis on the sector by the government and the availability of skilled and talented manpower with a panache for innovative thinking has propelled the nation into the third-largest incubator in the world,” said Rahul Arora, Head – Office Leasing Advisory, JLL India.
According to him, JLL has partnered with over 50 start-ups and closed nearly 70 office transactions in 2022 for around 1.3 million sq ft across Bangalore, Chennai, Delhi-NCR Mumbai, Hyderabad, and Pune.
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The metro cities of Bangalore, Mumbai and NCR are top start-up destinations in the country; followed by cities such as Chennai, Pune, Hyderabad, and Kolkata. The IT capital of India, Bangalore, leads space leased by start-ups with an increase from 1.75 million sq. ft in 2021 to 2.19 million sq ft in the first half of this year.
“The start-up ecosystem in the country has been rapidly expanding and has emerged as one of the largest consumers for flex space having absorbed close to 12,500 seats in the first half of 2022. Along with cost rationalisation, access to new-age, tech-enabled offices which represent their identity are key drivers that we think will result in increased demand from new start-ups for flexible office spaces,” said Samantak Das, Chief Economist, India, JLL.
Co-working providers and IT & ITeS segment are the biggest contributors towards space leased by start-ups since 2021 in Bangalore. Delhi has seen a more than 2 times jump in gross leasing from 0.80 million sq ft in 2021 to 1.96 million sq ft.
According to experts, India is poised to witness an exponential growth in its startup ecosystem which will further enhance the demand in office space.
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