BFSI Sector Drives Commercial Real Estate Demand in Major Indian Cities
Tech cities like Bengaluru, Hyderabad, Chennai, and Pune are driving real estate demand from BFSI GCCs, while Mumbai and Delhi NCR are favored by domestic BFSI occupiers.
Bfsi SectorReal Estate DemandTech CitiesMumbaiHyderabadReal EstateNov 04, 2024
According to a report by JLL, Mumbai, Bengaluru, and Hyderabad account for over 50% of the total space leased by the BFSI sector in India. Delhi NCR also plays a significant role, with an 18% share of domestic and 17% share of international BFSI companies leasing space.
JLL India highlights that the BFSI sector is experiencing robust growth, fueled by rapid technological advancements, talent availability, and evolving market dynamics. The sector's share in office leasing has risen from an average of approximately 11% in the 2017-2019 period to 17-18% over the last few years.
Global players have been at the forefront of this expansion, accounting for over 65% of the BFSI sector’s activity in India. On average, these international entities have leased two-thirds of all office space occupied by the BFSI sector over the past six years. Mumbai leads the pack, with approximately 44% of the total space occupied by domestic financial organizations. Bengaluru, with a 30% share, is the preferred hub for foreign organizations, thanks to its robust tech ecosystem and top talent.
The country's fintech market, currently valued at $584 billion, is projected to reach approximately $1.5 trillion by 2025. This growth is reflected in the increasing presence of global capability centres (GCCs) across India. The BFSI industry already accounts for a substantial 20% share of these GCCs, with over 1,900 GCCs offering end-to-end services, positioning India for further growth in this sector.
Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL, stated, “The BFSI sector is spearheading India's economic growth, driving innovation and digital transformation. As the sector evolves, we anticipate continued robust demand for office spaces that can support innovation, attract top talent, and meet evolving consumer demand. The overall BFSI segment leased over 11 mn sq ft in 2023, the highest ever, and is on track to surpass that number in 2024.”
Samantak Das, Chief Economist and Head – Research and REIS, India, JLL, added, “We are already seeing that the tech cities of Bengaluru, Hyderabad, Chennai, and Pune account for over 80% of all BFSI GCCs’ demand, while domestic BFSI demand is driven by Mumbai and Delhi NCR, which together account for around 65% share. The sector's dynamic needs present significant opportunities for the real estate industry to create sophisticated, technology-enabled workspaces that cater to the unique requirements of financial institutions.”
The BFSI sector's growth and evolving needs are presenting significant opportunities for the real estate industry to create modern, technology-enabled workspaces that cater to the unique requirements of financial institutions, ensuring continued robust demand for office spaces in the coming years.
Frequently Asked Questions
Which cities are driving BFSI GCCs demand in India?
Tech cities like Bengaluru, Hyderabad, Chennai, and Pune are driving real estate demand from BFSI GCCs in India.
What is the current share of BFSI in office leasing?
The BFSI sector's share in office leasing has increased from an average of approximately 11% in the 2017-2019 period to 17-18% over the last few years.
Which city leads in office space leasing for domestic BFSI companies?
Mumbai leads the pack with approximately 44% of the total space occupied by domestic financial organizations.
What is the projected growth of the Indian fintech market by 2025?
The country's fintech market, currently valued at $584 billion, is projected to reach approximately $1.5 trillion by 2025.
What role do global capability centres (GCCs) play in the BFSI sector's growth?
Global capability centres (GCCs) are playing a significant role in the BFSI sector's growth, with over 1,900 GCCs offering end-to-end services and the BFSI industry already accounting for a substantial 20% share of these GCCs.
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