Indian start-ups are all set to lease about 29 million sq ft between 2022 and 2024, an increase from 22.4 million sq ft leased during 2019-2021. Their total occupancy is currently at 49.7 million sq ft, and it is likely to cross 78.3 million sq ft by 2024.
In all, start-ups will account for 13 percent of overall occupied office space by 2024, from a mere two percent in 2010. They will be occupying 22 percent of India’s office leasing in 2024. Their occupancy has consistently grown at a 38 percent CAGR over the last 12 years.
In 2019-21, start-ups in Hyderabad accounted for 18 percent of the 22.4 million sq ft office space leasing, mostly in HITEC city and Gachibowli. Incidentally, Hyderabad and Bengaluru contributed to more than half of the leasing done by India’s top six cities, also comprising NCR, MMR, Pune, and Chennai.
The office demand will be led by fintech and logistics start-ups that have grown due to digital adoption and the e-commerce boom. In fact, they hold a healthy pipeline in the potential unicorn list. While the realtors are considering ways to attract more players, metro cities are the major hubs for start-ups. Non-metro cities are seeing growth in start-up leasing as well as flex space take-up due to the low cost of living, reduced capex, and work from anywhere trend.
On the other hand, start-ups are looking for well-managed spaces with flexible lease terms, minimal lock-ins, and security deposits.