AMCHAM’s Karnataka Chapter hosted an interactive session, in partnership with Cushman & Wakefield, on ‘Growing Institutionalization and Impact on the Bengaluru Office Market’ on October 14th. This was a closed door session with select U.S. companies and C&W leadership. The discussion focused on the fact that Bengaluru, Asia Pacific’s second-largest Grade A office market by stock after Tokyo, remains #1 in terms of office demand in the country. The strong market fundamentals and superior quality office assets in India have seen this asset class garner a lion’s share of the last decade’s institutional fund inflows. As of Q2 2022, 33% (~55 MSF) out of 168 MSF of Grade A office space stock in the city, has investor participation either through full ownership or partial stake, up from just 4% in 2010. The large institutional presence has amounted to an enormous transformation, resulting in a multifold change in the quality of office assets and services. With this context in mind, the session covered how Bengaluru accounts for 20-25% of India’s gross leasing for office space with robust demand from IT, engineering, BFSI occupiers, and their GCCs. Despite a decline in leasing momentum during 2020; rents have risen to an average of one dollar and twenty-five cents from its sub-dollar start. The session also covered how investors are primarily targeting income-yielding assets, but they are also willing to assume some development risk, given the strong market fundamentals. The session was attended by IBM, Trellance, Fidelity and Citrix.