Flex workspace to cross 60 million sqft by 2023, says report

Gurgaon: As companies look to come up with innovations in their office environment, the stock of flex workspace is likely to cross 60 million sqft in both metro and non-metro cities by 2023.
A recent report by Colliers, a global real estate services company, and Qdesq, a booking platform for workspaces, has claimed that a reverse migration to Tier 2 cities because of the pandemic, a constant growth of new startups and an increased confidence among companies to occupy new office spaces following a rise in vaccination rates have given the boost to the flex industry across the country.
According to the study, consultants, IT and e-commerce companies planning to establish multiple satellite offices in suburban locations will drive the demand.
Metro cities, the study said, were the strongholds of flex spaces, accounting for about 88% of the total stock in the third quarter of 2021. But flex space is emerging in non-metro cities as well as large enterprises are moving to a decentralised structure, with focus on flexibility and convenience of their employees. The report said the total flex stock in non-metro cities was likely to reach 7.8 million sqft by 2023, a 50% increase from the current levels. The data showed that after a dip in occupancy and office prices during the pandemic, flex space was reviving in the latter part of 2021 with an average occupancy of 71%. Prices for each seat have also seen an improvement of 21% as of September 2021, after falling about 30% during the lockdown.
Ramesh Nair, CEO (India) and MD (market development-Asia) at Colliers, said, “The flex market in India is evolving. Many enterprises have been incorporating a flex space component in their portfolios. Such spaces are currently operating at about 70%, and the trend is slowly inching towards pre-lockdown levels.”
He said there were various companies that were looking at next-generation offices that were unique to their needs. “Flex workspace operators must continue to focus on customisation and provide on-demand workspaces,” Nair added.
Paras Arora, founder and CEO of Qdesq, said the next 12-18 months were likely to witness businesses of all sizes. “The importance of agility and decentralisation has been underlined and highlighted by the pandemic. This concept will become critical to businesses as they adapt to change and impel the industry forward. That’s what the future looks like for India,” he added.
Vimal Nadar, senior director and head of research at Colliers India, summed up the trend. “In the latter part of 2021, metro cities have been seeing a renewed demand from occupiers across the spectrum. Even in non-metro cities, companies have been taking up seats for their sales and regional offices, leading to higher occupancy. Occupiers are evaluating the concept of ‘work from near home’ through satellite and hub-and-spoke offices. We foresee that these offices will be an amalgamation of traditional leases and flex spaces,” he added.