Commercial
Bengaluru’s Booming Workspace Rental Market: Why Companies are Choosing the City
August 08, 2025
Bengaluru, known as the "Silicon Valley of India," has rapidly evolved into one of the country’s most vibrant and sought-after commercial office destinations. The city's rapid growth and its increasing importance in the global business landscape have been driven by several factors. As companies and investors continue to focus on Bengaluru, demand for office space in key areas has surged. In this blog, we’ll explore Bengaluru's prominent position in India’s commercial real estate market, the driving forces behind its booming workspace rental sector, and why now is the perfect time for companies to establish a presence in the city.
Bengaluru’s Position in India’s Commercial Real Estate Landscape
There are currently accounts for over 31% of India’s total office leasing market, making it a central hub for Bangalore’s commercial office spaces across the country. Among Tier-1 cities, Bengaluru leads the charge in gross office space absorption. This is particularly evident in the context of the growing demand from major global enterprises, technology firms and innovative startups. The city has become a magnet for businesses in sectors such as IT, AI and Global Capability Centres (GCCs), which require state-of-the-art office spaces to house their expanding operations.
This surge in leasing activity has solidified Bengaluru’s position as the undisputed leader in India’s commercial real estate market, attracting both domestic and international investors. The city's thriving startup ecosystem, robust infrastructure and skilled talent pool have made it the ideal destination for companies looking to establish or expand their operations in India.
Surge in Demand – What’s Driving Office Rentals Up?
One of the primary factors contributing to the rise in office rental prices in Bengaluru is the explosive growth in the city’s IT and AI sectors. As technology continues to be at the forefront of business transformation, both established firms and emerging players in the tech space require premium, Grade A office space for rent in Bangalore.
- AI and IT Sector Expansion: Bengaluru’s reputation as a global technology hub has been further bolstered by the rapid expansion of artificial intelligence and IT sectors. These industries, which thrive on innovation and collaboration, demand modern, flexible office spaces equipped with the latest technology and infrastructure. The growth in AI startups and R&D centres has further added to the demand for cutting-edge commercial office properties.
- Rise in R&D Centres and Tech Startups: The increasing establishment of R&D centres in Bengaluru by global companies, alongside the burgeoning startup ecosystem, has fuelled the need for well-located and fully-equipped office spaces. This trend is particularly visible in areas like Whitefield and the Outer Ring Road (ORR), which are witnessing a significant growth in office space leasing activity.
- Shift from Hybrid to Full-Scale In-Office Operations: A key trend observed in Bengaluru’s workspace rental market is the shift from hybrid to full-scale in-office operations by large enterprises. As companies look to bring employees back to the office, the demand for expansive, flexible workspaces has intensified. This is driving the need for high-quality office spaces that are not just functional but also conducive to employee collaboration and wellbeing.
- Infrastructure and Policy Support: Bengaluru’s world-class infrastructure, coupled with favourable policy support from local and state governments, has made it an attractive destination for business expansion. The city boasts a wide range of office spaces with easy access to transportation networks, including metro lines and major highways, making it an ideal location for large enterprises.
Rental Growth Trends to Watch in 2025
As we look ahead to 2025, the Bengaluru workspace rental market is poised to continue its upward trajectory. Several factors indicate a strong rental growth outlook for prime micro-markets within the city:
- Projected 5–7% Rent Hikes in Prime Micro-Markets: Leading commercial districts in Bengaluru, including Whitefield, ORR and Koramangala, are expected to see rental growth in the range of 5-7% in the coming year. This growth is driven by sustained demand from IT and business services companies seeking Grade A office spaces.
- 26% YoY Increase in Office Space Leasing Activity: In areas like ORR and Whitefield, office space leasing has surged, with a remarkable 26% year-on-year increase in leasing activity. These areas are emerging as key hubs for global enterprises looking to establish a presence in Bengaluru.
- Demand Outpacing Supply in Grade A Spaces: The demand for Grade A office space is far outpacing supply, especially in key commercial hubs. With limited availability of prime office spaces, businesses are facing greater competition for top-tier office locations, leading to higher rental rates. This trend underscores the increasing value of well-located Grade A commercial buildings in Bengaluru.
- Leasing Now Offers Long-Term Cost Advantages: With the cost of rentals rising steadily, leasing office space now presents long-term cost advantages for enterprises. Companies that secure quality office space in emerging business districts can lock in favourable rental terms before the market tightens further.
What Enterprises are Looking For in Bengaluru’s Market?
As Bengaluru’s commercial real estate market becomes more competitive, enterprises are becoming more selective about the office spaces they choose. In particular, businesses are looking for spaces that align with their operational needs, employee wellness goals and sustainability commitments. Here’s what enterprises are focusing on when choosing office spaces in Bengaluru:
- Ready-to-Occupy and Warm Shell Office Spaces: Companies prefer ready-to-occupy office spaces that require minimal fit-out work. This trend is particularly evident in the growing demand for warm shell office spaces, which offer a balance of functional design and flexibility for companies to make quick adjustments.
- Sustainability, Wellness Amenities and Future-Proofed Infrastructure: There is a strong emphasis on sustainability and employee wellness in Bengaluru’s office rental market. Enterprises are increasingly seeking office spaces that incorporate eco-friendly features such as energy-efficient systems, water conservation measures and green building certifications like LEED. Additionally, amenities that promote employee wellness, such as fitness centres, green spaces and on-site cafeterias, are becoming key considerations.
- Integrated Campuses for Large Teams: Large enterprises, especially those in the BFSI (banking, financial services, and insurance), IT/ITES sectors and global businesses, are looking for integrated campuses that can accommodate large teams. These campuses provide a cohesive environment for collaboration and growth, with ample space for both office operations and employee engagement.
- Proximity to Talent and Transit Corridors: With Bengaluru’s expanding office market, enterprises are increasingly looking for office spaces that are well-connected to transit corridors and located near talent-rich areas. Proximity to key transportation networks, such as metro stations and highways, is a major consideration for companies seeking to attract top talent and ensure ease of commuting for employees.
Why Now is the Right Time to Lease in Bengaluru?
As demand for office space in Bengaluru continues to rise, now is the right time for enterprises to secure quality office space before rental prices escalate further. Here’s why leasing office space in Bengaluru now makes strategic sense:
- Securing Quality Space Before Further Rental Hikes: The market is seeing strong demand for Grade A commercial buildings, and rental rates are projected to increase in key micro-markets. By leasing office space now, companies can secure favourable terms before prices rise further.
- Gain Early Access to Talent-Rich Corridors: Office space for rent in Whitefield and ORR is emerging, which provides early access to talent-rich corridors. These areas are rapidly becoming hubs for technology, R&D and innovation-driven enterprises, making them ideal locations for businesses looking to tap into Bengaluru’s talent pool.
- Lock-in Favourable Terms in Emerging High-Growth Zones: As demand for office space in Bengaluru grows, businesses that act quickly will be able to lock in favourable leasing terms in high-growth zones before the market becomes even more competitive.
- Avoid Competition as Demand Spikes Across Sectors: With increasing demand from IT, AI and other sectors, competition for prime office spaces is intensifying. Companies that secure office space now will have an advantage in avoiding the potential challenges that come with fierce competition for leasing opportunities in the future.
How Brigade is Enabling Enterprise-Ready Workspaces?
Brigade Group is playing a significant role in enabling enterprise-ready workspaces in Bengaluru. With Grade A commercial spaces located across prime areas of the city, Brigade’s portfolio includes fully integrated business campuses that provide modern office spaces designed to meet the needs of today’s businesses. Brigade’s office spaces are equipped with world-class amenities, sustainable infrastructure and prime locations, ensuring enterprises have access to the best in commercial real estate.
Conclusion
Bengaluru’s office rental market is booming, with demand outstripping supply in key commercial zones. For enterprises, now is the time to secure Grade A office space in Bengaluru’s prime locations. With rising rents, strong demand from the IT, AI and BFSI sectors, and a rapidly expanding infrastructure, leasing office space in the city ensures long-term growth, resilience and access to top talent. The right location and space can unlock significant value for businesses as they navigate the changing commercial landscape.
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