Should Start Ups Consider Bangalore or Hyderabad to Setup Business? | CORPORATE ETHOS

Should Start Ups Consider Bangalore or Hyderabad to Setup Business?

By: | March 7, 2018
Mar 7: Bangalore,the Silicon Valley of India, holds a special attraction for technology companies to locate their offices but rising rent, lack of office space in key areas, technology disruption, the emergence of flexible office space may force start-ups to look at nearby options such as Hyderabad.
Colliers Research said that considering Bangalore’s reputation as the most happening place, the start ups shoudl use the garden city for their front office requirements and the city has an abundant talent pool that can’t be compared with any other city in India. However, cost conscious companies should start exploring Hyderabad for their backend operations, according to Suradbhi Arora, Senior Associate Director, Research at Colliers International Ltd.
Colliers Research pointed out that since 2015 the number of new entrants setting up business in Bangalore has declined consistently.  On an average of the 76% of the total leasing transactions recorded over the past three years represented expansions, primarily by technology and BFSI occupiers. The surge in relocation moves as a proportion of transactions have surged from 4% in 2015 to 21% in 2017 in the past three years due to high cost of operations.
Among the toop seven Indian cities in office space utilisation, Hyderabad has emerged in the third position in the past three years with 5.8 mn sq ft of gross absorption in 2017 and accounts for 13% of national office space absorption, exceeding Mumbai , the financial capital.
Bangalore’s office space has increased 100% in the past decade and accounts for 25% of the India’s total A grade office inventory, according to Colliers Research.
The market dynamics of Bangalore is also changing. Currently, the Outer Ring Road (ORR) is the preferred micromarket in Bengaluru, with an average share of 45% of total leasing volume over the past three years. The Secondary Business District (SBD) and Central Business District (CBD) are the second most popular locations, with average shares of 12% and 9% respectively. By 2020, the new supply of 27.5 million sq. ft. (2.5 million sq. m.) is likely to get added in Bengaluru’s Grade A inventory. The epicentre of the upcoming supply is Whitefield with around 36% share, followed by ORR (26%), North (12%). The rest of the supply is shared equally by all other micromarkets. (Source: PRNewswire)