While Bengaluru continues to top 20 Asia-Pacific region (APAC) cities in flexible office space stock, Delhi NCR has emerged as the third-largest, overtaking Beijing and Seoul, with a stock of 8.4 million square feet (msf), according to a report from real-estate consultant CBRE.
According to the report, titled H1 2023 Asia Pacific Flexible Office Market, technology firms accounted for the largest portion of leasing activity, with a 35 percent share, followed by business services at 16 percent, finance firms at 12 percent, retail firms at 8 percent, and life sciences at 7.
The CBRE APAC study covered 20 major Asia-Pacific markets, including Japan, China, South Korea, Philippines, Hong Kong, Australia, Vietnam, Singapore, Australia, Taiwan, New Zealand and India.
Indian cities
As of March 2023, Bengaluru recorded 12.9 msf of flexible stock, the highest among all major APAC cities.
New flex space supply in Delhi NCR and Bengaluru accelerated from 2022, with the two cities witnessing the addition of a combined 3.1 msf of stock in Q1 2023.
The other Indian cities that made it to the top 10 cities were Hyderabad and Mumbai, with 6 and 4.7 msf of flexible office stock, respectively.
"With leasing by flex space operators remaining robust in Q1 2023, the pace of new flex centre openings over the remainder of the year in these two markets is expected to be brisk," the report added.
Market outlook
The report added that the APAC flex space market continues to display stable growth, with the total volume of flexible office space in the region reaching 87 msf, as of March 2023 -- an increase of 6 percent from September last year.
The report points out that the APAC region is home to approximately 3,000 flex space centres.
“In an environment of ongoing economic uncertainty, businesses are recognising the value of portfolio flexibility and cost management. This has resulted in a heightened demand for flexible office solutions as occupiers seek agility and cost-effective options. The continued growth of the flex space market underscores its importance as a strategic choice for businesses navigating the evolving landscape of workspace requirements," Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said.
The report highlights the remarkable growth and resilience of the APAC market, with significant increases in the total volume of flexible office space across multiple key markets. This reflects the growing demand for agile and adaptable workspace solutions in the region, Henry Chin, Global Head of Investor Thought Leadership and Head of Research, CBRE APAC, added.
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