Unicorn renting of office space is expected to double from current levels as they are likely to occupy approximately 14 million square feet of office space by 2024.
This is being led by major offices that are likely to lease unicorns in the key markets of Bengaluru and Delhi NCR, according to a report by property consultancy firm Colliers. Unicorns in the top six cities are likely to rent an average of about 2.7 million square feet of office space per year for the next two years, which is a threefold increase from the previous three years.
Ramesh Nair, chief executive officer, India and managing director (market development), Asia, Colliers said: “India has already seen about 15 new unicorns this year so far. At the same time, we are now staring at a slowdown in funding in space, which could likely to be a short-lived eruption, we will likely see demand in the market again in a few months for flex space, but also for traditional space, especially from fintech, e-commerce and logistics start-ups.”
All in all, the entire startup ecosystem, made up of unicorns and non-unicorns, is likely to occupy 78 million square feet of office space by 2024, a 16% increase from 2021, he said.
Bengaluru remains the main start-up hub with a 34% lease share in 2019-22. Delhi-NCR witnessed a threefold increase in leasing by start-ups in 2021 year-on-year.
However, Mumbai has only seen certain start-up activity over the years due to relatively higher rents and high cost of living acting as a deterrent to start-up businesses.
According to Colliers, metro cities remain the main hubs for start-ups, while non-metro cities are seeing growth in startup renting and the use of flexible space thanks to low cost of living, reduced capital expenditure and work from anywhere trends. “Emerging hubs such as Jaipur, Ahmedabad, Indore and Coimbatore are likely to witness an increase in flex space and start-up occupancy as entrepreneurs increasingly use these locations to launch operations,” the report highlights.