Flexible office space operators currently have a portfolio of 53.4 million square feet and the number is projected to grow 52 per cent by 2025 to 81 million square feet on rising demand from corporates, according to real estate consultant Vestian.
In its report ‘Flexing the Workspace-Back to Office’ released on Wednesday, Vestian highlighted that over 7.6 lakh seats are available with flexible space operators spread across more than 1,000 centres in India.
The report mentioned that there are 50 major flexible space operators. The top 10 players hold 84 per cent of the total flexible office space portfolio.
Vestian CEO Shrinivas Rao said the flexible spaces sector is at a nascent stage in India compared to other countries such as the US and European countries.
“It has grown gradually in India and flexible office stock has reached 53.4 million square feet. Furthermore, the stock is anticipated to reach 81 million square feet by 2025, growing at a CAGR (Compound Annual Growth Rate) of 23 per cent, as COVID-19 catalysed the market growth,” he said.
The report noted that wider adoption of flexible spaces in India started in 2015-16 when the market was fragmented and unorganised. However, it has since grown rapidly and become more organised.
Flexible spaces are garnering significant attention not only from startups and SMEs (Small and Medium Enterprises) but also from large enterprises, the report said.
“Flexible space operators provide what occupiers are looking for – low cost, flexibility and technologically advanced spaces. While 2023 is likely to be a challenging year for businesses amid macroeconomic uncertainty and fear of recession, flexible spaces are a way to navigate global headwinds,” Rao observed.
As several companies return their employees back to the office under a hybrid model, it is expected the demand for flexible spaces to rise.
Furthermore, Vestian has projected that the flexible office sector would constitute around 25 per cent of the overall office space absorption by 2025.
In the 2022 calendar year, the total office space leasing by co-working/flex space operators stood at 8.4 million square feet. The co-working players are expected to take on lease 10.5 million square feet this year and 12.8 million square feet next year.
Flexible office spaces broadly include dedicated desks, hot desking, co-working spaces, and serviced and managed office spaces. While co-working centres are at the most flexible end of the spectrum, managed offices would be at the less flexible end, it added.
WeWork India, Smartworks, Simpliwork Offices, Awfis, Table Space, Skootr, The Executive Centre, Urban Vault, IndiQube, Incuspaze, 91Springboard, 315Work Avenue, Akasa Coworking, The Office Pass, Avanta India and BHIVE Workspace are among major co-working/flex space operators.
Prominent office areas like Whitefield in Bengaluru, Hitec City in Hyderabad, Baner in Pune, Andheri (E) in Mumbai, and DLF Cybercity in Gurugram are popular with flex space operators and occupiers/tenants alike.
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