IT and ITeS sectors seem to be losing their dominance in office space takeup, with banking, financial services and insurance (BFSI) emerging as a new star.
Share of IT/ITeS sector in total office space absorption across major cities reduced to just 24% in the first half of 2016, from 36% in the same period of 2011, according to commercial data information and analytics firm Propstack.
The BFSI sector, however, is gradually reclaiming its footprint, with its share increasing to the highest among peers at 34% in H1 2016, from just 24% five years ago.
Companies like Accenture, IBM, JP Morgan, etc, are shifting some of their critical, knowledge-based operations to India, which is giving a major philip to the BFSI office space takeup now, according to Raja Seetharaman, co-founder, Propstack.
“ITeS sector was typically a third-party work, which is moving to captive work by many companies these days. A lot of analysis and quality work are being done in India these days, unlike just setting up call centers earlier,” he said.
This increase continues to ride on the back of a rising number of BFSI transactions in Bangalore and the National Capital Region (NCR), where office demand has been IT/ ITeS-dominated, according to Anuj Puri, chairman and country head, JLL India.
“During the past two to three years, an increase in the volume of leases carried out by BFSI companies has been noticed,” he said.
The average deal sizes ranged between 5,000 sq ft and 15,000 sq ft in cities like Mumbai, NCR and Pune. While the number of smaller deal sizes seen in NCR has increased, bigger deal sizes – ranging from 20,000 to 30,000 sq ft – are seen in Bangalore, according to JLL.
Smart offices have replaced those traditional offices for IT companies these days, with concepts like hot-desking, plug & play, etc, thereby promoting collaborative work culture, according to Ajay Rakheja, co-founder and chief executive officer, CREIndia.com, a commercial real estate portal. “These new concepts are helping IT firms to optimise their office space and control cost,” he added.
Mumbai will see an increase in leasing activity by BFSI companies, with key commercial district like Bandra Kurla Complex and the western suburbs witnessing major activity, according to Puri.
Gurgaon is emerging as a second CBD in National Capital Region due to several companies moving there, ad thus BFSI is also moving closer to their clients in this SBD, he added.
Source: Economic Times
