Silicon Valley has long been considered the center of the startup world, but in recent years, a new contender has emerged. India's startup ecosystem has been growing at an unprecedented pace, and the industry is quickly gaining global recognition.
With over 82,000 organizations and 107 unicorns, the Indian startup ecosystem is changing the way businesses are conducted in the country, and beyond.
In this article, we'll take a closer look at how Indian startups are making their mark in the real estate sector, and how they are reshaping the startup world, beyond Silicon Valley.
Indian startup industry has leased over 24.8 million sq ft of office space, making it one of the top office occupiers in the country.
Choosing the right office space is a crucial decision for startups, and it is essential to consider projections and estimates when making this decision. The office space needs to be flexible enough to accommodate future growth, and startups need to have an idea of how many employees they will add in the future to ensure that they do not fall short of space or underutilize the office space.
Top Startup Office Occupiers
- Bengaluru leads with 2.19 million sq ft
- Delhi NCR with 1.96 million sq ft
- Mumbai with 0.96 million sq ft
- Chennai with 0.65 million sq ft
- Pune with 0.64 million sq ft
- Hyderabad with 0.34 million sq ft
- Kolkata with 0.23 million sq ft
City-wise Office Leasing by Indian Startups in the first half of 2022
The city-wise office leasing by Indian startups in the first half of 2022 highlights the top locations where startups are securing office space. Bengaluru, the IT hub of India, leads the way with the highest office leasing by Indian startups, followed closely by Delhi NCR, a region comprising New Delhi and its surrounding areas. The report also shows that Mumbai, Chennai, Pune, Hyderabad, and Kolkata are emerging as attractive destinations for startups, indicating a growing trend of regional diversity in the Indian startup ecosystem.
According to data from JLL, Bengaluru leads the way with 2.19 million sq ft of office space leased by Indian startups in H1 2022, followed by Delhi NCR with 1.96 million sq ft, Mumbai with 0.96 million sq ft, Chennai with 0.65 million sq ft, Pune with 0.64 million sq ft, Hyderabad with 0.34 million sq ft, and Kolkata with 0.23 million sq ft.
Share of Startups in India’s Office Leasing Activity
The data on the share of startups in India's office leasing activity emphasizes the growing significance of startups in the commercial real estate market in India.
With a 28% share, startups are emerging as the top office occupiers in the country, followed by GICs or Global In-house Centers with a share of 24%.
The report also indicates that Indian MNCs, foreign and domestic others have considerable shares in India's office leasing activity, indicating a diverse range of occupiers in the market. The foreign and domestic others with shares of 20% and 19%, respectively. Indian MNCs have a share of 9% in India’s office leasing activity.
Gross Office Leasing by Startup Sector
The data from JLL Report reveals that co-working providers are the biggest occupiers of office space among Indian startups, accounting for 60% of office leasing by the startup sector in 2021 and 59% in 2022.
IT & ITES comes in second with a share of 22% in 2021 and 16% in 2022, while telecom, healthcare, biotech, real estate, and construction account for 4% of office leasing in 2021 and 9% in 2022. BFSI accounts for 3% in 2021 and 5% in 2022, while manufacturing/industrial has a share of 2% in 2021 and 4% in 2022. Consulting has a share of 4% in 2021 and 3% in 2022. E-commerce and miscellaneous account for 1% and 4% of office leasing in 2021, respectively, and 3% and 1% in 2022, respectively.
Flex Seats Leased by Startups in India in the first half of 2022
In the first half of 2022, startups in India leased 19% of the total flex seats, with the IT/ITES and new tech sectors leading the way by leasing 40% of the flex seats. Meanwhile, telecom, media, healthcare, biotech, real estate, and construction leased 10% of the flex seats, while BFSI and consulting leased 9% and 8%, respectively. Manufacturing/industrial and others accounted for 6% each, while e-commerce and education accounted for 1% each. The data suggests that startups are increasingly leveraging the flexibility and cost-effectiveness of flex seats for their office space needs.
India’s startup ecosystem is booming, and the industry is making its presence felt in the real estate sector as well. Startups are leading the way in office leasing activity, and the demand for flexible office spaces is on the rise. When choosing an office space, startups need to consider projections and estimates to ensure that the space is flexible enough to accommodate future growth. With the right office space, startups can create a work environment that fosters innovation and growth.