Equirus Capital highlights strong momentum in India’s real estate sector as commercial space demand in the top eight cities surges from 39.3 million sq. ft in 2020 to 66.4 million sq. ft in 2025, marking an impressive 11% CAGR. Bengaluru and Mumbai are global standouts, offering affordable rentals and unmatched value for international firms seeking scale and skilled talent.
Commercial Demand Rises in Major Metros
India’s real estate boom is driven by multiple segments—commercial, residential, retail, and hospitality. In particular, the commercial space absorption has skyrocketed, with Bengaluru standing out globally. From CY16 to 9MCY24, Bengaluru absorbed 75.2 million sq. ft of office space, outperforming international hubs like New York, London, and Hong Kong, which saw net declines or modest gains. Mumbai also made a strong mark, absorbing 39.6 million sq. ft in the same period.
Affordable Rentals Set New Standards
Bengaluru and Mumbai’s rental prices of $27 per sq. ft per year remain drastically lower than the global benchmarks—London at $207, New York at $82, Tokyo at $76, and Hong Kong at $70. This remarkable affordability, combined with world-class infrastructure, facilitates expansion for multinational enterprises seeking scale and operational flexibility without incurring heavy overheads.
Bengaluru: The Talent Magnet and Cost Leader
A crucial competitive advantage is Bengaluru’s low operating cost, nearly 81% less than Tier-II US cities. In fact, the operating cost per FTE (Full-Time Employee) in Bengaluru stands at 19 (US cities indexed at 100), making it ideally suited for business process management, outsourcing, and shared service centres. The city’s skilled workforce and cost efficiency are repeatedly cited by global firms as decisive factors for establishing and scaling operations in India.
The Flexinsights Take
The latest signals from India’s real estate sector show a thriving environment for commercial investment, attractive rentals, and a deep bench of skilled talent. Cities like Bengaluru and Mumbai aren’t just leading locally—they’re setting new international benchmarks for absorption, affordability, and workforce value. For global businesses ready to scale, India’s top metros offer an unmatched proposition for the future of work.
