Flex Spaces Achieve Record Share in India's Office Leasing Market
Tuesday, 03 September 2024, 10:41 IST
A recent report reveals that flexible offices have achieved their highest share of overall office leasing volume in the first half of 2024. Their portion of total office leasing has increased from 10.2 percent in 2019 to 12.7 percent from January to June this year, indicating a growing preference among occupiers for these adaptable spaces.
The absorption of flex spaces by companies, both domestic and foreign, has been on a consistent rise since the COVID-19 pandemic hit. From 85,234 seats taken up across the top eight Indian cities in 2021, the number has significantly risen to 155,000 seats in 2023. In the first six months of 2024 alone, 106,554 seats have been taken up, according to a report by real estate consultancy Cushman & Wakefield, in collaboration with managed workspace operator Table Space. It was titled "From Flex to Managed - Evolution of the Flex Space Industry".
The largest user of flexible office spaces is the Information Technology (business process management) sector, which represents 50 percent of the total absorption this year. This is followed by engineering and manufacturing at 18 percent, and banking, financial services, and insurance (BFSI) at 12 percent. During the Covid-19 pandemic, many companies downsized their traditional office spaces due to decreased demand. Post-pandemic, high costs and the shift to remote work have driven these companies to choose flexible office solutions.
These places also offer attractive space for freelancers, startups, and small businesses. In a release last month, Crisil said that flex offices are more in demand due to their customizable workspace offerings and relatively flexible lease terms. "Ongoing factors like talent access, flexible costs, risk-mitigated portfolios, and heightened business focus are pivotal drivers", said Sameer Singh, chief operating officer of another flex office operator, 91Springboard.
According to the report from Cushman & Wakefield, the supply of flexible office spaces has significantly strengthened. Over the past five years, the total footprint of flex space operators in India has doubled. In 2022 and 2023, the annual growth rates for these spaces were 23 percent and 18 percent, respectively, marking the highest increases ever recorded.
Several flex space operators have recently announced their expansion plans. For example, IndiQube and WeWork India both plan to add 1.5 million sq ft of flex space in 2024-25. Another operator, 315Work Avenue, plans to double its portfolio to 4 million sq ft in 18 months. "With the first half of 2024 already accounting for 70 percent of last year's total flex-space demand, we anticipate a potential record-breaking year for flex seat leasing", said Ramita Arora, managing director, Bengaluru and head of flex, India, Cushman & Wakefield.
The absorption of flex spaces by companies, both domestic and foreign, has been on a consistent rise since the COVID-19 pandemic hit. From 85,234 seats taken up across the top eight Indian cities in 2021, the number has significantly risen to 155,000 seats in 2023. In the first six months of 2024 alone, 106,554 seats have been taken up, according to a report by real estate consultancy Cushman & Wakefield, in collaboration with managed workspace operator Table Space. It was titled "From Flex to Managed - Evolution of the Flex Space Industry".
The largest user of flexible office spaces is the Information Technology (business process management) sector, which represents 50 percent of the total absorption this year. This is followed by engineering and manufacturing at 18 percent, and banking, financial services, and insurance (BFSI) at 12 percent. During the Covid-19 pandemic, many companies downsized their traditional office spaces due to decreased demand. Post-pandemic, high costs and the shift to remote work have driven these companies to choose flexible office solutions.
These places also offer attractive space for freelancers, startups, and small businesses. In a release last month, Crisil said that flex offices are more in demand due to their customizable workspace offerings and relatively flexible lease terms. "Ongoing factors like talent access, flexible costs, risk-mitigated portfolios, and heightened business focus are pivotal drivers", said Sameer Singh, chief operating officer of another flex office operator, 91Springboard.
According to the report from Cushman & Wakefield, the supply of flexible office spaces has significantly strengthened. Over the past five years, the total footprint of flex space operators in India has doubled. In 2022 and 2023, the annual growth rates for these spaces were 23 percent and 18 percent, respectively, marking the highest increases ever recorded.
Several flex space operators have recently announced their expansion plans. For example, IndiQube and WeWork India both plan to add 1.5 million sq ft of flex space in 2024-25. Another operator, 315Work Avenue, plans to double its portfolio to 4 million sq ft in 18 months. "With the first half of 2024 already accounting for 70 percent of last year's total flex-space demand, we anticipate a potential record-breaking year for flex seat leasing", said Ramita Arora, managing director, Bengaluru and head of flex, India, Cushman & Wakefield.
