Equirus Capital Reports Strong Growth in India's Real Estate Sector
Equirus Capital highlights robust growth across residential, commercial, retail, hospitality, and SEZ spaces in India, driven by urbanization and investment. Bengaluru and Mumbai stand out for their competitive rental prices and global workforce advantage.
Real EstateCommercial SpaceBengaluruMumbaiEquirus 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 Equirus Capital?
Equirus Capital is a Mumbai-based full-service investment banking firm that provides a range of financial services including advisory, capital raising, and asset management.
What is the CAGR of commercial space demand in India's top eight cities?
The compound annual growth rate (CAGR) of commercial space demand in India's top eight cities has been 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 Bengaluru compare in terms of office space absorption globally?
Bengaluru led globally with 75.2 million sq. ft of office space absorption, outpacing other major cities like Tokyo and Mumbai Metropolitan Region.
What is the office rental price in Bengaluru and Mumbai compared to other global cities?
Bengaluru and Mumbai recorded office rentals at $27 per sq. ft per year, which is significantly lower compared to $207 in London, $82 in New York, $76 in Tokyo, $70 in Hong Kong, and $56 in Beijing.
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