Flex Spaces to Dominate India's Office Market: Over 80% Occupiers Plan to Expand Through Flexible Workspaces
India's office market is witnessing a significant shift towards flexible workspaces, with over 80% occupiers planning to expand their office portfolio through flex spaces in the next few years.
Flexible WorkspacesIndia Office MarketColliers IndiaReal EstateOffice ExpansionReal EstateSep 08, 2024
The growth in flex space endorsement is expected to be highest amongst multi-national companies (MNCs), with an anticipated 3-4X times rise from current levels by 2030.
With a significant rise in share of flex spaces in Grade A office space demand and changing occupier preferences, flex spaces have solidified their position in the India office market. As occupiers disclose their future portfolio expansion plans, the survey trends in the report are indicative of a high growth trajectory for flex spaces in India in the coming years.
For the purpose of this report, the survey spanned across a varied spectrum of start-ups, MNCs and GCCs targeting senior management personnel including key decision makers in the areas of real estate, administration, corporate strategy, etc.
“With flex space offerings transforming from niche to mainstream, they are expected to increasingly define the contours of Grade A office space demand in India. As per the report, 60% occupiers are likely to have a flex share of 20% or more in their office portfolio over the course of next 3-5 years, up from the present 40%,” says Arpit Mehrotra, Managing Director, Office services, Colliers India.
Flex spaces are now being repurposed and fulfilling roles beyond support centers. With both cost arbitrage and enterprise-level offerings coming into play, occupiers are increasingly embracing flex spaces for their core business operations. About 45% and 35% of mid and large sized companies respectively are carrying out their core business operations in flex spaces.
“Workspaces have steadily evolved to become centers for collaboration, innovation, wellbeing etc. and flex spaces provide holistic solutions for the new-age workspace. With maturity of flex space market and enterprise-level services on offer, occupiers are amenable with relatively longer commitment periods as well. About three-fourths of the surveyed occupiers, including MNCs and large domestic occupiers, feel positively inclined for relatively longer commitment periods,” said Vimal Nadar, Senior Director & Head of Research, Colliers India.
Location continues to be of significant importance to occupiers, with about 60% respondents considering it as the most important parameter for expansion. Interestingly, while expanding, occupiers are likely to lean towards flex spaces with attractive offerings in central areas as compared to facilities in peripheral areas.
Going ahead, about 45% of surveyed occupiers would opt for future expansion through flex spaces in CBD/SBD locations of tier I or tier II cities. In terms of work-place strategy, flex spaces are likely to champion distributed work models. About half of the larger companies including Global Capability Centers (GCCs) and MNCs envisage flex spaces to act as both hub and spoke offices in the next few years.
Frequently Asked Questions
What percentage of occupiers plan to expand their office portfolio through flex spaces in the next few years?
Over 80% occupiers plan to expand their office portfolio through flex spaces in the next few years.
Which type of companies are expected to see the highest growth in flex space endorsement?
Multi-national companies (MNCs) are expected to see the highest growth in flex space endorsement, with an anticipated 3-4X times rise from current levels by 2030.
What percentage of occupiers are likely to have a flex share of 20% or more in their office portfolio over the next 3-5 years?
60% occupiers are likely to have a flex share of 20% or more in their office portfolio over the next 3-5 years.
What is the average commitment period for flex spaces expected to reach in the next few years?
The average commitment period for flex spaces is expected to reach close to 3 years, a significant increase from the typical lease agreements of less than a year in the pre-pandemic period.
What percentage of surveyed occupiers would opt for future expansion through flex spaces in CBD/SBD locations of tier I or tier II cities?
About 45% of surveyed occupiers would opt for future expansion through flex spaces in CBD/SBD locations of tier I or tier II cities.
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