Flex spaces in India are witnessing fast growth, with its share in occupiers’ total portfolio rising to an estimated 10-12 per cent in 2023, from 5-8 per cent before the pandemic in 2019, according to a report by Colliers. In India, technology occupiers have been one of the driving forces of rising flex space demand across the top cities. They currently occupy over 50 per cent of the total flex space across Chennai, Delhi-NCR, Pune and Hyderabad.
“Other major sectors that are actively embracing hybrid working through flex include Engineering & Manufacturing and BFSI. In larger markets such as Mumbai and Bengaluru, demand by BFSI & Engineering occupiers for flex space is almost at par with Technology occupiers. Demand from technology occupiers will continue to remain strong in next two years led by a strong recovery and robust hiring plans as businesses continue to focus on rationalising costs,” Colliers said in a statement.
It also said occupiers in India have been quick to adopt flex spaces, attracted by the flexibility, agility, and cost-effectiveness they offer. Flex spaces are becoming an integral part of occupiers’ portfolio, with its share in occupiers’ total portfolio rising to 10-12 per cent in 2023, from 5-8 per cent before the pandemic in 2019.
Peush Jain, managing director (office services), India, said, “Flex spaces have emerged as a core strategy for occupiers to adopt a decentralized workspace model, serving as a promising alternative to the traditional paradigm. As compared to shorter lease tenures of 1-2 years pre-pandemic, occupiers are now going for longer commitments of 3-5 years with flex space operators as they look to integrate flex space as a long-term solution. During 2022, leasing by flex space operators touched 7 mn sq ft across top-6 cities, the highest in any year. This was a 46 per cent YoY increase led by prominent IT hubs such as Bengaluru and Pune.”
As of Q1 2023, India’s flex space penetration stands at 6.5 per cent and continues to expand, led by occupiers’ rapid adoption of hybrid & de-centralised work strategy in a bid to build new age workspaces at an optimal cost. Other markets in the APAC region have seen relatively slower growth in flex space, with flex space penetration hovering around 2-4 per cent.
Flex spaces have also provided companies the agility required to scale operations up or down quickly, allowing businesses to respond effectively to evolving circumstances.
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