Startups to Account for Nearly 30 Percent of Gross Office Leasing Activity in 2022

29 Nov 2022 , 04:42 PM

Business Wire India

• Over 6.97 million sq. ft of space leased to startups in H1 2022
• Gross leasing for startups jumped from 17% in 2021 to 28% in H1 2022
• Delhi NCR witnessed leasing go up from 0.80 million sq. ft in 2021 to 1.96 million sq. ft in H1 2022
• Bengaluru continues to be the leader in startup leasing activity

​
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.

About JLL
 
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of September 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
 
JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of close to 12,000 professionals. The Firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in.