5 to 7 percent increase likely
Experts are predicting a rise in office rents in Bengaluru, the IT capital of India. Due to the demand from IT and AI-based companies, office rents in the city could increase by 5 to 7 percent. Last year, there was significant demand from global capability centres, and now, there is growing demand from IT and AI research companies. The Indian government’s incentives for the establishment of AI research institutions are contributing to this rise in demand. Demand is also growing from online gaming startups and pharmaceutical companies. Analysts believe that in 2025, these trends will make flexible office spaces game-changers in the market.
In fact, the gap between the demand and supply of premium grade-A spaces in Bengaluru has significantly raised input costs. Flex office rents in key areas of the Bengaluru Central District have risen by 20 percent compared to last year. As a result, input costs have increased considerably. Currently, the rent for flex office spaces in Bengaluru ranges from Rs 6,000 to Rs 40,000 per seat. Grade-A office spaces near ID corridors and CBD areas range from Rs 15,000 to Rs 50,000 per seat. Demand for flex spaces has grown in East and North Bengaluru. In the East IT corridor in Whitefield, demand for flex spaces has significantly increased in the past six months.
