Unicorns to Occupy More than Double Office Space By 2024
Unicorns, or start-ups with a valuation of USD1 billion or more, are likely to occupy about 14 million sq feet of office space by 2024, a two-fold rise from the current level. This is led by large offices that unicorns are likely to lease across major markets of Bengaluru, and Delhi NCR. Unicorns are likely to lease an average of about 2.7 million sq feet of office space annually across 2022-24 across the top six cities, a three-fold increase from the preceding three years. India has already seen about 15 new unicorns so far this year. At the same time, we are now staring at a funding slowdown in the space which is likely to be a short-term blip. We are likely to see enquires coming back into the market in a few months for flex space, as well as traditional space, especially from fintech, e-commerce and logistics start-ups. Offices become even more crucial for start-ups wherein they are trying to set up and inculcate culture for the organization. Start-ups with a clear business model and good corporate governance will continue to grow and expand as the country’s digital economy is strong. On the whole start-ups (unicorns+ non-unicorns) are likely to occupy 78 million sq feet of office space by 2024, a 16% increase from 2021 leasing by start-ups in mn sq ft Bengaluru remains the top start up hub with a 34% leasing share during 2019-22, with Koramangala, HSR and Indiranagar being the preferred locations for start-ups. A well-developed ecosystem, deep technology talent, and a culture of entrepreneurship are major factors attracting start-ups here. Delhi-NCR is amongst the fastest-growing market in terms of leasing by start-ups. Delhi-NCR witnessed a three-fold increase in leasing by start-ups during 2021 on a YoY basis. The region benefits from being a catchment for education institutions in North and East India, and strong infrastructure. Mumbai has seen certain pockets of start-up activity over the years. However, relatively higher rentals, and high cost of living are often seen as deterrents by early-stage companies. While metro cities remain the core hubs for start-ups, non-metro cities are seeing growth in start-up leasing as well as flex space take-up due to low cost of living, reduced CAPEX and work from anywhere trend. Emerging hubs such as Jaipur, Ahmedabad, Indore, and Coimbatore are likely to witness a rise in flex space and start up occupancy as entrepreneurs are increasingly leveraging these locations to launch operations.
Tags : Unicorns Occupy Double Office Space 2024 Bengaluru Delhi NCR Ramesh Nair CEO India and MD Market Development Asia Colliers fintech e-commerce logistics start-ups