Flex workspaces, that are ready-to-move-in and managed office spaces either private or shared, are witnessing strong growth. Metro cities remain the stronghold of flex spaces, accounting for about 88 per cent of the total flex stock as of Q3 2021, according to a report by real estate consultant Colliers India.
“The pandemic has provided an opportunity to operators to open centers in non-metro locations. Flex space in non-metro locations is witnessing growth since early 2021, led by occupiers establishing their sales and regional offices. We predict that by 2023, total flex space in metro and non-metro locations will touch 60 millon sq feet, assuming lower rates of Covid, steady economic activity and no large-scale restrictions,” Colliers said in the report.
It added that the occupancy levels are reviving and grew to 71 per cent in the third quarter of 2021. It also said that before the pandemic, the occupancy level in metro cities was about 75 per cent (during January 2019-March 2020), which declined to 61 per cent during April 2020-June 2021. It almost recovered to almost the pre-pandemic level to 72 per cent during the third quarter 2021.
The report also said that currently, professional services, technology and IT firms are the largest demand drivers, collectively accounting for 35 per cent share in total space uptake in flex centers. As e-commerce companies are expanding in metro as well as non-metro cities, we expect their share in total seat uptake to increase over the next two years.
It also said large enterprises are also increasingly embracing the hub and spoke model and setting up satellite and sales offices in non-metro cities. “Our top location picks, as indicated in the map, are emerging hotspots that are experiencing robust activity and evident growth. Our recommendation to operators is to consider these cities for expansion and future growth.”
Ramesh Nair, chief executive officer (India) and managing director (market development-Asia) of Collier, said, “The world as we know has changed in the last one-and-half years. Flex spaces that were thought of as a fad four years ago, have now evolved as a mainstream segment. The concept of flex spaces are fast evolving with the market having expanded beyond entrepreneurs and freelancers (its original demand drivers). By 2019, flex demand was led by established enterprises. With the onset of new developments, flex spaces are now offering customizable managed office solutions to occupiers.”
Paras Arora, founder and chief executive officer of Qdesq, said, “Flexible workspaces, which means ready to move-in and managed office spaces, either private or shared (coworking), are now an integral part of the occupier’s portfolio and future growth strategy tool. This CRE asset class has evolved with maximum agility and tacit learning. What was an alternate form of office spacing pre-COVID is now mainstream and, for some occupiers, the way to go. The pandemic has underlined the importance of commute time, decentralization of workspace, and a hybrid and productive workspace approach. The office space segment is now future-ready (Hub – Spoke and Work from Anywhere) and the new narrative have moved from one confined option to on-demand and anywhere usage.”
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