Equirus Capital Highlights Strong Growth in India's Real Estate Sector
Equirus Capital, a Mumbai-based investment banking firm, has reported significant growth across various real estate segments in India, driven by urbanization and steady investments.
Real EstateCommercial SpaceBengaluruInvestment BankingEquirus CapitalReal Estate MumbaiSep 08, 2025
The note emphasized that the demand for commercial space in India’s top eight cities has been robust, registering a compound annual growth rate (CAGR) of 11% between 2020 and 2025. Bengaluru, in particular, has stood out as a preferred hub, offering global enterprises a highly cost-effective workforce with operating costs nearly 81% lower compared to Tier-II US cities.
India: A Fast-Growing Hub for Affordable Office Spaces
Equirus observed that India continues to be a high-growth, affordable office space destination, drawing global businesses seeking scalability, lower costs, and access to skilled talent. The demand for commercial space across the top eight cities surged from 39.3 million sq. ft in 2020 to 66.4 million sq. ft in 2025, marking an 11% CAGR.
When compared with international peers, Indian cities stand out for office space absorption. From CY16 to 9MCY24, global markets like New York (-5.4 mn sq. ft), London (-3 mn sq. ft), and Hong Kong (3.6 mn sq. ft) saw relatively lower net absorption. By contrast, Bengaluru led globally with 75.2 million sq. ft absorbed, followed by Tokyo (52 mn sq. ft) and Mumbai Metropolitan Region (39.6 mn sq. ft).
World-Class Spaces at Affordable Rentals
Another striking trend lies in India’s competitive rental pricing. As of Q3CY24, Bengaluru and Mumbai recorded office rentals at $27 per sq. ft per year, making them some of the most affordable globally. In comparison, rentals stood at $207 in London, $82 in New York, $76 in Tokyo, $70 in Hong Kong, and $56 in Beijing.
This pricing advantage, coupled with quality infrastructure, positions Indian cities as attractive alternatives for multinational corporations seeking expansion without incurring high overhead costs.
Bengaluru: A Global Workforce Advantage
Beyond real estate, Bengaluru continues to strengthen its reputation as a global workforce hub. The city’s cost competitiveness makes it especially appealing for BPM (Business Process Management) operations. According to Equirus, when indexed against Tier-II US cities where operating cost per FTE (Full-Time Employee) is marked at 100, Bengaluru stands at just 19 (as of FY23).
Such stark differences underline why the city remains a magnet for outsourcing and shared service centers of multinational companies.
Frequently Asked Questions
What is the current growth rate of commercial space in India's top eight cities?
The demand for commercial space in India’s top eight cities has been robust, registering a compound annual growth rate (CAGR) of 11% between 2020 and 2025.
Why is Bengaluru a preferred hub for global enterprises?
Bengaluru is a preferred hub for global enterprises due to its highly cost-effective workforce, with operating costs nearly 81% lower compared to Tier-II US cities.
How does India compare to other global markets in terms of office space absorption?
Indian cities stand out for office space absorption. From CY16 to 9MCY24, Bengaluru led globally with 75.2 million sq. ft absorbed, followed by Tokyo (52 mn sq. ft) and Mumbai Metropolitan Region (39.6 mn sq. ft).
What are the office rental prices in Bengaluru and Mumbai compared to global cities?
As of Q3CY24, Bengaluru and Mumbai recorded office rentals at $27 per sq. ft per year, making them some of the most affordable globally. In comparison, rentals stood at $207 in London, $82 in New York, $76 in Tokyo, $70 in Hong Kong, and $56 in Beijing.
Why is Bengaluru a magnet for outsourcing and shared service centers?
Bengaluru’s cost competitiveness and skilled workforce make it especially appealing for BPM (Business Process Management) operations. When indexed against Tier-II US cities, Bengaluru stands at just 19 for operating cost per FTE (Full-Time Employee).
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