Bengaluru: Artificial Intelligence and robotics companies have significantly contributed to Bengaluru’s office space absorption in the second quarter of 2024, according to Vestian’s quarterly office market report, The Connect Q2 2024. These sectors accounted for 21% of the total office space absorbed in the city during this period, reflecting the rapid global advancement in AI and a supportive local ecosystem. Overall, the IT-ITeS sector, which includes AI and robotics, represented 69% of Bengaluru’s total office space absorption in Q2 2024.
Bengaluru emerged as the leading contributor to office space absorption across India, accounting for 25% of the total share in Q2 2024. Hyderabad and Mumbai followed with 20% each. Pune exhibited the highest quarterly growth in value terms, around 307%, while Chennai saw a 48% decline in absorption during the same period. The National Capital Region (NCR) also experienced a quarterly decline of 37%. All cities except Chennai and NCR reported increases in office space absorption both quarter-on-quarter and year-on-year. In Q2 2024, the IT-ITeS sector dominated office space absorption with a 38% share, followed by BFSI (Banking, Financial Services, and Insurance) at 12% and Consulting Services at 10%. Flex Spaces accounted for 8% of the total absorption during this quarter.
The first half of 2024 witnessed over 30 million square feet of office space absorption, marking an 18% increase compared to the first half of 2023. Given the strong demand for grade-A office spaces across India’s top seven cities, the total absorption for 2024 is expected to surpass the 60 million square feet mark, maintaining the momentum seen in 2023. Q2 2024 saw office space absorption reach 17.04 million square feet, a 27% increase over the previous quarter and a 23% rise compared to the same quarter the previous year. This surge can be attributed to an improved global macroeconomic scenario and India’s robust growth amidst global geopolitical challenges.
New office space completions also saw an uptick, increasing by 17% in the first half of 2024 compared to the same period in 2023, totalling 23.2 million square feet. Q2 2024 alone reported a 15% quarterly increase and a 10% yearly rise in new completions. While Pune and Bengaluru saw declines in construction activities, other cities, notably Mumbai, registered significant growth. Mumbai reported 3.3 million square feet of new completions in Q2 2024, marking a 230% quarterly rise. Bengaluru led new completions with a 28% share, closely followed by Mumbai with 27%. Southern cities, including Bengaluru, Chennai, and Hyderabad, accounted for 57% of total new completions in Q2 2024, although this was a drop from 63% in the previous quarter.
