ANAROCK's India Office Market Update H1 FY23 indicates that with approximately. 6.1 Mn sq. ft. of new office completions and approx. 6.08 mn sq. ft. office absorption in H1 FY23, Bengaluru was far ahead of Pune in office activity.

Both Pune and Bengaluru have seen the IT-ITeS sectors dominating office space demand over the last decade.

While Bengaluru and Pune remain the top commercial office destinations for IT-ITeS and coworking occupiers, Bengaluru has overtaken Pune in overall office space activity.

ANAROCK's India Office Market Update H1 FY23 indicates that with approximately. 6.1 Mn sq. ft. of new office completions and approx. 6.08 mn sq. ft. office absorption in H1 FY23, Bengaluru was far ahead of Pune in office activity.

During the period, Pune saw a mere 0.85 mn sq. ft. of new office completions and approx. 1.35 mn sq. ft. of office space absorption in H1 FY23.

"However, Pune is ahead of its IT counterpart as far as office vacancy levels are concerned," says Prashant Thakur, Sr. Director - Research, ANAROCK Group. "At 7.8%, Pune's office vacancy rate is the lowest amongst all top 7 cities, including Bengaluru - which had an office vacancy of 10.9% in H1 FY23. Both cities recorded similar yearly growth of 6% in average monthly office rentals."

Both Pune and Bengaluru have seen the IT-ITeS sectors dominating office space demand over the last decade.

However, Bengaluru has stood its ground despite past office demand slowdowns, including during the COVID-19 pandemic. It remains the country's most active office market with approx. 6.08 mn sq. ft. net absorption in H1 FY23 - the highest recorded in the city in the last six years.

“Going forward, to the backdrop of a possible recession in the US in early 2023, it will be interesting to see how far these two cities' office markets will be impacted," says Thakur. "There is considerable uncertainty in many global economies, including Europe and the US, as they battle high inflation."

Many multinationals and businesses have become cautious about expansion in such an environment. Many global tech giants have already started layoffs to curtail costs and weather-proof their balance sheets. Currently, the Indian economy is in a far stronger position than many of its western counterparts.