MUMBAI: The Banking, Financial Services, and Insurance (BFSI) sector in India has rapidly increased its demand for office spaces driven by technological advancements, digital penetration, a skilled workforce, and evolving market dynamics, with 2024 leasing activity projected to significantly surpass the record set in 2023.
Global players have been at the forefront of this expansion, dominating over 65% of the BFSI sector’s activity in India. On average, these international entities have accounted for two-thirds of all office space leased by the sector over the past six years.
The BFSI sector’s share in office leasing has increased from an average of around 11% in the 2017-2019 period to 17-18% over the last few years and is slated to continue the growth, showed data from JLL India. In 2023, the segment recorded the highest-ever leasing of 11 million sq ft.
Until the third quarter of 2024, office leasing in the BFSI sector accounted for 16.4% of the 53.4 million sq ft total gross leasing, across the country’s top seven cities including Mumbai, Bengaluru, Delhi NCR, Chennai, Hyderabad, Pune, and Kolkata.
“India’s BFSI sector is experiencing remarkable growth, with significant opportunities for the office real estate market. The country’s fintech market, currently valued at $584 billion, is projected to reach $1.5 trillion by 2025. This expansion is reflected in the increasing presence of global capability centres (GCCs) across India,” said Rahul Arora, Head – Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.
The BFSI industry already accounts for a substantial 20% share of these GCCs. With over 1,900 GCCs offering end-to-end services, according to him, India is poised for further growth in this sector, driving continued demand for office spaces.
“The BFSI sector is spearheading India’s economic growth, driving innovation and digital transformation. As the sector evolves, we anticipate continued robust demand for offices that support innovation, attract talent, and meet evolving consumer demand. The sector’s dynamic needs present opportunities for the realty industry to create sophisticated, technology-enabled workspaces that cater to the unique requirements of financial institutions,” said Samantak Das, Chief Economist and Head – Research and REIS, India, JLL.
Tech hubs Bengaluru, Hyderabad, Chennai, and Pune account for over 80% of BFSI GCC demand, while domestic BFSI demand is concentrated in Mumbai and Delhi NCR, holding a 65% share combined, he added.
Mumbai, the country’s financial capital, leads the pack, accounting for around 44% of the total space occupied by domestic financial organisations. Bengaluru is seen as the preferred hub for foreign organisations with a 30% share, reflecting its unparalleled tech ecosystem that attracts top talent and financial services organisations from across the globe.
Mumbai, Bengaluru, and Hyderabad account for over 50% of the total space leased by the BFSI sector in the country, while Delhi NCR also makes its presence felt with 18% share of domestic and 17% share of international BFSI companies’ leasing space.
The ongoing digital revolution, facilitated by government initiatives like UPI and adoption of emerging technologies like Artificial Intelligence, blockchain, and cloud computing will accelerate the sector’s evolution, necessitating adaptable and future-ready workspaces. This will be strengthened by the increasing demand for professional talent.
