The banking, financial services, and insurance (BFSI) sector has seen substantial growth in office space demand, emerging as the second-largest office space lessee in India, just behind the IT/ITeS sector, according to a recent report by realty consultancy JLL.
This shift underscores Mumbai’s dominant role as a hub for domestic financial organisations, while Bengaluru continues to attract foreign financial firms drawn to its tech ecosystem.The BFSI sector in India is expected to surpass last year’s record of approximately 11 million square feet (msf) in office leasing, as reported by JLL. From January to September 2024, BFSI leasing totaled around 8.8 msf, accounting for 16.4% of the country’s total gross leasing of 53.4 msf.Data from JLL reveals that the BFSI sector’s share in office leasing has grown from an average of 11% in 2017-2019 to 17-18% in recent years. By the end of the third quarter of 2024, BFSI accounted for 16.4% of the 53.4 million square feet of gross office leasing across India’s top seven cities, including Mumbai, Delhi NCR, Kolkata, Bengaluru, Chennai, Hyderabad, and Pune.
Mumbai leads among Indian cities, accounting for 44% of the total space occupied by domestic BFSI firms. Bengaluru has emerged as a preferred destination for international BFSI companies, securing a 30% share due to its strong tech talent pool and advanced infrastructure. Together, Mumbai, Bengaluru, and Hyderabad account for over half of the total office space leased by BFSI entities in India.
International players lead
International players have been instrumental in driving BFSI office leasing, with global firms consistently representing over 65% of the sector’s leasing activities. This trend aligns with the country’s fintech growth trajectory, as India’s fintech market—currently valued at $584 billion—is projected to reach $1.5 trillion by 2025. This growth has spurred an increasing demand for global capability centers (GCCs), where the BFSI sector already holds a 20% share among over 1,900 GCCs operating in India.
While Bengaluru, Hyderabad, Chennai, and Pune account for over 80% of the demand for BFSI GCCs, domestic BFSI leasing remains concentrated in Mumbai and Delhi NCR, which together represent around 65% of the sector’s domestic leasing. The JLL report highlights this regional distinction as BFSI organizations continue to expand, driving sustained demand for office spaces across the country’s major cities.
