While Bengaluru and Pune remain the top commercial office destinations for IT-ITeS and coworking occupiers, Bengaluru has overtaken Pune in overall office space activity. With 6.1 million sq. ft. of new office completions and nearly According to the Anarock report, Bengaluru had 6.08 million square feet of office absorption in H1 FY23, far outpacing Pune. During the period, Pune saw a mere 0.85 Mn sq. ft. of new office completions and approximately 1.35 million sq. ft. of office space absorption.
However, Pune is ahead of its IT counterpart in terms of office vacancy levels. According to Prashant Thakur, Sr. Director – Research, ANAROCK Group, at 7.8%, Pune’s office vacancy rate is the lowest amongst all top 7 cities, including Bengaluru – which had an office vacancy rate of 10.9% in H1 FY23. Both cities recorded similar yearly growth of 6% in average monthly office rentals.
Both Pune and Bengaluru have seen the IT-ITeS sectors dominating office space demand over the last decade. However, Bengaluru has stood its ground despite past office demand slowdowns, including during the COVID-19 pandemic. It remains the country’s most active office market with about. 6.08 million sq. ft. net absorption in H1 FY23 – the highest recorded in the city in the last six years.
Bengaluru Office Market Highlights
Bengaluru: Office Demand-supply Dynamics
Pune Office Market Highlights
Pune: Office Demand-supply Dynamics
Going forward, in the backdrop of a possible recession in the US in the new year, it will be interesting to see how far the office markets of Bengaluru and Pune get impacted. As India is not completely decoupled from global markets, caution is likely till early 2023.