India’s flexible space stock is expected to grow by 10-15% year-on-year from the current 36 million sqft in the next three years, according to a report by CBRE.
The report highlights that as of Q1 2021, Bengaluru holds a flex stock of 11.6 million sqft which is the maximum in the country, followed by Delhi-NCR at 6.6 million sqft and Hyderbad at 5.7 million sqft.
While these cities, along with Mumbai will continue to see further demand, flex demand in cities like Pune and Chennai are also expected to see growth in the coming years. In 2020 alone, over 75,000 seats were leased in flex spaces across India.
Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE, said, “The pandemic influenced the way businesses function and their overall strategies. Businesses are evaluating new working models that keep workplace flexibility at the centre, balancing employee benefits and business profitability. These models will not only ensure flexible working, but also ensure employee safety once offices resume normal operations. The demand for physical office spaces will continue to rise as employee look forward to normal work days; with mass vaccination propelling further sectoral growth.”
To improve their product offering, landlords may consider getting into ‘strategic’ partnerships with operators or creating their own brands to cater to the demand for flex spaces in their portfolio.
Tier 2 and 3 markets are also expected to witness an increase in flex demand. Tier 2 activity is expected to be dominated mostly by domestic operators during the next couple of years. On the other hand, operators may emphasis on higher flexibility and innovative solutions/deal structures such as reverse officing, fit-outs as a service, pay-per-use models, all access products, etc. among others.
Source : ET Realty