The flexible workspace stock in India is expected to cross 80 million sq ft by the end of 2025 from the current stock of 47 million sq ft. Capex savings, managing headcount volatility, implementing hybrid working and avoiding upfront fit-out costs would drive flexible space take-up in the coming years, according to a report by real estate consulting firm CBRE South Asia.
The report, titled ‘The Era of Flexibility in India’, said Bengaluru, with 14.6 million sq ft, dominated India’s current flexible space stock as of H1 2022, followed by Delhi-NCR with 9.1 million sq ft, Hyderabad with 7.1 million sq ft, Pune at 5.6 million sq ft, and Mumbai 5.3 million sq ft. Other cities with flexible space stock include Ahmedabad, Kolkata, Chennai and Kochi.
“Occupiers are refining their portfolios and workplace strategies to accommodate hybrid working arrangements. Existing real estate portfolios have to support new workstyles, viz., an office-centric future, a virtual first future, or a balanced approach,” the report said.
It added that companies that continue to adopt flexible spaces would be better positioned to embrace hybrid working arrangements, support their employees, and remain agile in their real estate strategies.
“Providing interim solutions for a dispersed workforce, expanding local options for staff, and offering on-demand meetings and collaboration space for employees are some of the key drivers for flexible office space,” CBRE said.
According to the report, the occupiers are exploring ‘Core + Flex’, a popular strategy offering occupiers a way to seamlessly integrate traditional leased and flexible office space in their portfolios. ‘Core + Flex’ allows occupiers to be more financially efficient while providing employees with a consistent experience and company culture. This is an attractive strategy for occupiers to manage lease expirations and minimize underutilisation of space.
Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “The need for agility is more imperative than ever before, as workforce behaviors have transformed during the pandemic and are unlikely to return to pre-pandemic norms. As occupiers plan real estate strategies amid the uncertain scenario, flexible spaces are becoming a useful solution. Most companies are likely to lean towards the diverse locations and cost-effective nature of flexible solutions.”
Ram Chandnani, managing director (advisory and transactions services) of CBRE India, said, “Flexible spaces continue to hold sway among corporates, with occupiers of all sizes increasing the percentage of flexible spaces in their real estate portfolio. Most companies now use flexible spaces to enter a new market, offer on-demand meeting and collaboration spaces for employees, and test alternate workplace designs.”
He added that the trend indicates that while flexible space offerings continue to evolve, delivering them in a way that makes it easier for the occupier is more important than ever.
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