The banking, financial services, and insurance (BFSI) sector has recorded a major uptick in demand for office spaces, emerging as the second-largest lessor in India after the IT/ITeS sector, according to a report by JLL, a realty consultancy.
BFSI's share in office leasing has increased from approximately 11 percent on average in 2017-2019, to 17-18 percent over the last few years, according to data from JLL.
Until the third quarter of 2024, the sector accounted for 16.4 percent of the 53.4 million square feet (sq ft) of gross leasing across the country's top seven cities (Mumbai, Delhi NCR, Kolkata, Bengaluru, Chennai, Hyderabad, and Pune).
Global players have been at the forefront of this expansion, comprising over 65 percent of the BFSI sector’s leasing. On average, international entities have accounted for two-thirds of the office space leased by the sector over the past six years.
The country's fintech market, currently valued at $584 billion, is projected to reach approximately $1.5 trillion by 2025. Experts say the growth is reflected in the increasing presence of global capability centres (GCCs) across India.
"The BFSI sector already accounts for a 20 percent chunk of these GCCs. With over 1,900 GCCs offering end-to-end services, India is poised for further growth in this sector, driving continued demand for office spaces," said Rahul Arora, Head - Office Leasing & Retail Services, and Senior Managing Director (Karnataka, Kerala), JLL India.
Mumbai leads
The JLL report added that Mumbai leads the pack, accounting for approximately 44 percent of the space occupied by domestic financial organisations. "With a 30 percent share, Bengaluru is seen as the preferred hub for foreign organisations, reflecting its unparalleled tech ecosystem that attracts top talent and financial services organisations from across the globe," said the report.
Mumbai, Bengaluru, and Hyderabad account for over 50 percent of the total space leased by the sector in the country across both domestic and international firms, while Delhi NCR makes its presence felt with 18 percent share of domestic and 17 percent share of international BFSI companies' leasing .
"We are seeing that the tech cities of Bengaluru, Hyderabad, Chennai, and Pune account for over 80 percent of the BFSI GCC demand, while domestic BFSI demand is seen in Mumbai and Delhi NCR, which together comprise about 65 percent," said Samantak Das, Chief Economist and Head – Research and REIS, JLL India.
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