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Flexible office spaces to gain 20 percent market share by 2022 end

By Rishabh Chamoli | 2022-10-07

Flexible workspaces across the six major cities in India are expected to garner 20 percent of the overall office space demand. As per reports, a six percent jump in the demand for flex spaces has been recorded over a year. The increased demand is attributed to the cost effective edge provided by these spaces.

Shared or flexible workspaces across the six major cities in India are expected to account for 20 percent of the total office leasing market share. Surpassing the 14 percent share in 2019, the overall demand is expected to reach 12 million sq ft by 2022 end, as per reports by an international real estate advisory firm.

The first half of 2022 witnessed a total of 18 percent share of flex spaces in the overall office leasing activity.

What is the reason behind the increased demand?
As employees return to offices post COVID outbreak, flexibility and agility have become the centre point of real estate decision making. Consequently, strong leasing is apparent in flexible spaces taken up by occupiers in H1 2022.

What is the demand share of flex spaces?
As per industry reports, co working operators have leased more than 75,000 seats in H1 2022, compared to 60,000 in 2021. Around 75 percent of the demand for co working spaces has been taken up by the three largest commercial markets

45 percent in Bangalore
20 percent in Pune
10 percent in Hyderabad
The total demand is anticipated to reach 1,50,000 desks, accounting to an increase of 1.5X year on year by the end of 2022.

The report also highlights that the average monthly rentals in India may touch Rs 12,500 per desk by 2022 end, projecting a 13 percent YoY growth.

Which companies are contributing towards the demand?
H1 2022 witnessed the start ups gaining a 13 percent share in flex desks, while new age businesses including RetailTech, EdTech, HealthTech, and FinTech, among others, took up a market share of 20 percent with a collective uptake of approximately 15,500 seats.

Over 50 percent of leasing of flex spaces has come from MNCs. With the in trend, hybrid and work from anywhere culture, co working spaces are being embraced to motivate employees to work from locations closer to their homes and keep a check on dynamic real estate requirements at the same time.

The average transaction size of flex spaces is over 50 percent higher than that of any other sector from 2020 to H1 2022. With 35 transactions of 50,000 sq ft, the sector has already exceeded the full year big ticket activity of 2021.