Start-ups to take up nearly 30% of gross office leasing in 2022: Study

Bengaluru leads in terms of space leased by such companies, says JLL report

Start-ups took on lease 6.97 million sq ft of space in the first half of this calendar year and they will continue to be the top such clients for some years, said a report on Tuesday.

Start-ups' share in gross leasing grew from 17 per cent in 2021 to 28 per cent in the first half of 2022. Bengaluru, Delhi National Capital Region and Mumbai are India’s top start-up destinations and they are followed by Chennai, Pune, Hyderabad and Kolkata, according to real estate service firm JLL’s report. 

Global and domestic investors are investing money in the sector because of the potential for growth, it said. Bengaluru leads in terms of 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. The co-working and information technology and information technology-enabled services among start-ups has since 2021 been the biggest contributors towards space in Bengaluru. 

“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 India and MD, Karnataka & Kerala at JLL India.

Start-ups were among the largest takers for flex seats in the first six months of this calendar year at 19 per cent of the total 65,171 flex seats leased, compared to 16 per cent in 2021.

“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 H1 2022,” said Samantak Das, chief economist and head of research and REIS, India, JLL.

Along with cost rationalization, 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,” Das said.