Startups are fuelling India's next wave of growth, ushering in an era of unparalleled change and innovation in India as startups to account for nearly 30 percent of gross leasing activity in India in 2022, according to a report by Jones Lang LaSalle (JLL) India on November 28.
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, said the report.
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 report stated.
The IT capital of India, Bengaluru, leads in 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 and 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.
Also read: Net absorption for office space in Jan-Sep 2022 at 30.3 million sq ft across 7 cities: JLL
“In 2022, JLL has partnered with over 50 startups and closed nearly 70 office transactions, that’s about 13 lakh sq ft of space across Bengaluru, Chennai, Delhi NCR Mumbai, Hyderabad and Pune,” said Rahul Arora, Head Office Leasing Advisory India & MD, Karnataka and Kerala at JLL India.
"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."
Further, 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 perent of the total 65,171 flex seats leased, up from 16 percent in 2021, according to JLL.
“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 Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
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