Startups scale up

CRE Matrix and Colliers partnered together to figure how will this surge in digitisation translate into a larger share of demand for office space originating from start-ups

As India undergoes an unprecedented transformation – primarily “Digital Tech” in nature, the Indian Real Estate Industry was always expected to be one of the beneficiaries of disruption. Indian office markets clocked ~500msf of new office space leasing in last 20 years. Indian office markets will lease the next 500mn sq.ft in half the time over the next 10 years; and Indian and global start-ups will be right in middle of all the action.

Keeping these facts in mind, CRE Matrix and Colliers partnered together to figure how will this surge in digitisation translate into a larger share of demand for office space originating from start-ups. While this never-done-before research on categorizing occupiers into different buckets has been a herculean task, the findings have proven the hypothesis – start-ups are making their presence felt in the commercial office segment – at a growing pace.

Based on the research that has categorised occupiers into different buckets, the analysis clearly shows that Fortune 500 Companies and other large companies’ segments are plateauing with their occupancy annual growth entering single digits. However, the startups’ footprint has quadrupled over the last five years, contributing 10% to office occupancy today vs 3% in 2016. It is believed that there are enough reasons for this growth to continue over the next five years, and that too at a higher pace.

Colliers recently released its joint report with CRE Matrix, ‘Startups Scale Up’, stating that startups are expected to lease about 29 million sq feet between 2022 to 2024, a 1.3 times increase from the 2019-2021 period.