Mumbai, September 8, 2025 — Equirus Capital – Mumbai based full-service investment banking firm has released a press note on the development in the real estate sector. As per the press note, the Indian real estate sector is witnessing growth across segments. Residential, commercial, retail, hospitality, and SEZ spaces are witnessing strong demand, backed by urbanization, and rising investments. The demand for commercial space has grown at 11% CAGR from 2020-25 in the top 8 Indian cities. Bengaluru has emerged as one of the most cost-effective workforce city for Global enterprises, the cost is almost 81% lower vs Tier-II US cities.
India: A High-Growth, Cost-Effective Office Space Destination
India has emerged as a high growth, cost-effective office space destination. Businesses are looking at India for scalability, affordability, and a skilled talent pool. The demand for commercial space in Top 8 Indian cities has grown at a 11% CAGR in the year 2020-25, from 39.3 mn sq. ft to 66.4 million sq ft.
As global office markets mature, Indian cities dominate the net absorption. The cumulative net absorption of office space from CY16-9MCY24 for cities like New York (-) 5.4 mn sq ft, London (-) 3, HongKong 3.6 mn sq ft, Beijing 24.7 mn sq ft, Mumbai MMR 39.6 mn sq ft, Tokyo 52 mn sq ft and Bengaluru at the top with net absorption of 75.2 mn sq ft.
World-Class Office Spaces at Competitive Rental Costs
The office rentals as of Q3CY24 for Mumbai and Bengaluru was the most competitive among global cities. London was the costliest in terms of rentals for office space at $207 per sq ft per yr ($ psf/year). New York rentals recorded at $82, Tokyo at $76, Beijing at $56, HongKong $70, Mumbai at $27 whereas Bengaluru as the most affordable at $27/per sq ft per year.
The Most Cost-Effective Workforce for Global Enterprises
Bengaluru has emerged as one of the most cost-effective workforce cities for global enterprises, the cost is almost 81% lower vs Tier-II US cities. For comparison the operating cost in a Tier-II US city per FTE (Full Time Employee) per BPM Business process managedment is indexed at 100, the same is 19 for Bengaluru (As of FY23).