MUMBAI: Unicorns, or start-ups with a valuation of $1 billion or more, are likely to occupy about 14 million sqft 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 sqft 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 startups.
“Offices become even more crucial for start-ups wherein they are trying to set up and inculcate culture for the organisation. 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 sqft of office space by 2024, a 16 per cent increase from 2021,” Ramesh Nair, Chief Executive Officer, India and Managing Director, Market Development, Asia, Colliers.
Leasing by startups in mn sq ft
- Bengaluru remains the top startup hub with a 34 per cent leasing share during 2019-22, with Koramangala, HSR Layout and Indiranagar being the preferred locations for startups. A well-developed ecosystem, deep technology talent and a culture of entrepreneurship are major factors attracting startups here.
- Delhi-NCR is amongst the fastest-growing markets in terms of leasing by startups. It witnessed a three-fold increase in leasing by startups 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 startup 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 startups, non-metro cities are seeing growth in startup 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. (ANI/PR Newswire)