Bengaluru, October 3: Knight Frank India, in their latest report – India Real Estate: Residential and Office Q3 2024 (July – September 2024) cited that Bengaluru recorded office space transactions of 5.3 mn sq ft in Q3 2024.
Bengaluru led the growth of India’s commercial market, accounting for 28% of the 19 mn sq ft of transactions across the top eight cities. The city saw a remarkable YoY growth of 158%, mainly driven by the establishment of Global Capability Centers (GCCs) by corporations aiming to expand their long-term operations in the region.
Office completions in Q3 2024 were recorded at 2.5mn sq ft. The city witnessed the second highest rental value appreciation of 7% YoY, taking the aggregated rent to INR 90.3 per sq ft/ month.
In the third quarter of 2024, Global Capability Centers (GCCs) and India Facing Business emerged as the primary occupants of office spaces in Bengaluru. Leasing activity by GCCs reached 3.3 mn sq ft, witnessing a YoY growth of 383% in Q3 2024, compared to 0.7 mn sq ft in Q3 2023. Global Capability Centers (GCCs) accounted for 62% of the overall office space leasing volume in Bengaluru in the quarter, up from a 33% share in overall leasing in the same period in 2023.
Bengaluru’s residential market continued its robust growth in Q3 2024, with sales volumes reaching 14,604 units, an 11% rise compared to the same period in 2023, making it the second-highest in the country. The city also saw a 5% YoY increase in the number of residential units being launched at 13,966 units in Q3 2024, up from 13,353 units in Q3 2023.
Residential prices in Bengaluru saw a 10% YoY increase in Q3 2024, marking the highest growth rate among the eight major Indian cities, with the weighted average price reaching INR 6,326 per sq ft. This price rise was largely driven by strong demand, particularly in the premium segment.
Bengaluru experienced a notable shift in the distribution of residential sales across different price segments. Sales of houses priced below INR 5 mn saw a significant decline, dropping by 48% compared to Q3 2023 and now constituting only 5% of the total sales. Conversely, the mid-segment (INR 5-10 mn) saw a reduction in its share, falling from 52% to 31%. The premium segment, priced at INR 10 mn and above, saw substantial growth, with sales increasing by 95% compared to Q3 2023, now accounting for 63% of the total sales.
Shantanu Mazumder, Executive Director, Bengaluru, Knight Frank India said, “Bengaluru’s residential market has demonstrated remarkable resilience and growth, driven by robust demand across diverse segments, significant infrastructure upgrades, and a growing preference for the premium segment in Q3 2024. The market’s momentum is projected to continue, fuelled by the city’s expanding economic landscape and sustained buyer interest. Market dynamics have shifted, with Global Capability Centres (GCCs) and India-facing businesses playing key roles in reinforcing Bengaluru’s position as a premier destination for commercial real estate. The rise in office space transactions is primarily driven by corporations establishing GCCs to expand their long-term operations. Continued infrastructure investments, combined with Bengaluru’s strong reputation as a startup hub and centre for technology and innovation, are expected to sustain long-term demand for office spaces.”
