Mumbai, Maharashtra, India | 29th November 2022: Startups are fuelling India’s next wave of growth, ushering in an era of unparalleled change and innovation. Flourishing at an impressive pace, the Indian startup ecosystem is globally the third largest. Over the last few years, startups have also been extremely active in terms of real estate. With over 6.97 million sq. ft of space leased to startups in H1 2022, the industry is pegged to be one of the top office occupiers in the coming years according to JLL’s recent publication titled “A startup’s guide to office space”. Global and domestic investors have been aggressively investing money in the sector owing to the enormous growth potential.
The sector saw an expansion in gross leasing with its share growing from 17% in 2021 to an impressive 28% in H1 2022.
The metro cities of Bengaluru, Delhi National Capital Region and Mumbai are top startup destinations in India; followed by cities such as Chennai, Pune, Hyderabad and Kolkata. The IT capital of India, Bengaluru, leads space leased by start-ups with an increase from 1.75 million sq. ft in 2021 to 2.19 million sq. ft in H1 2022. Co-working providers and IT & ITeS segment are the biggest contributors towards space leased by start-ups since 2021 in Bengaluru. Compared to 2021, Delhi, in H1 2022 itself has seen a more than 2x jump in gross leasing from 0.80 million sq. ft in 2021 to 1.96 million sq. ft.
“India has emerged as the largest ecosystem for startups in the world with over two to three new startups 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. In 2022, JLL has partnered with over 50 startups and closed nearly 70 office transactions, that’s about 13 lac sq ft of space across Bengaluru, Chennai, Delhi NCR Mumbai, Hyderabad and Pune,” said Rahul Arora, Head Office Leasing Advisory India & MD, Karnataka & Kerala at JLL India.
Going the flex way
Even in terms of taking up flex space, which works well for their agile working styles, startups have been one of the biggest movers among all firms. Startups have been one of the largest takers for flex seats in the first six months of 2022 at 19% of the total 65,171 flex seats leased up from 16% in 2021.
“The startup 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 H1 2022. Along with cost rationalisation, access to new-age, tech-enabled offices which represent their identity are key drivers which we think will result in increased demand from new startups for flexible office spaces,” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
India is posed to witness an exponential growth in its startup ecosystem which will further enhance the demand in office space.