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Leasing by flexible workspace operators likely to touch 8.8 million sq ft this year: report

Bengaluru leads the flexible workspace stock with around 6 million sq ft

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Leasing by flexible workspace operators is expected to touch 8.8 million sq ft this year as operators rush to capture enterprise demand. Bengaluru leads the flexible workspace stock with around 6 million sq ft, says  Colliers Research.

Leasing by flexible workspace operators to account for about 18-20 percent of the total gross leasing in 2019, up from 7 percent in 2017.

Technology and e-commerce companies have been driving demand for flexible workspaces, it said.

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Bengaluru leads Indian flexible workspace stock with around 6 million sq ft. NCR has the second-largest stock with 19 percent with Mumbai close on their heels with 17 percent share of the total Indian flexible workspace stock, it said.

“Since the beginning of 2018, large enterprises have jumped onto the flexible workspace bandwagon, taking up about 18,200 seats. Over 2017-H1 2019, we note that technology and e-commerce companies have been driving demand for flexible workspaces”, says Ritesh Sachdev, Head- Occupier Services, India & Managing Director, South India at Colliers International.

About 33 percent of the occupiers surveyed said they are likely to take up space in a flexible workspace over the next 24 months, primarily for the host of benefits provided. About 45 percent of occupiers surveyed are uncertain about leasing in flexible workspaces, with the decision hinging on their expansion plans over the next two years. On the other hand, about 22 percent of the respondents said they are not likely to take up space in flexible workspace centers over the next 24 months.

As a result of occupier demands, flexible workspace operators have been growing their portfolio, and expanding at a rapid pace. The flexible workspace market in India is transitioning to a higher level of services, reflecting demand from enterprise occupiers for more customized spaces and bespoke services, it said.

“Our survey reveals that CRE objectives have undergone a shift, with occupiers giving first preference to creating an employee-friendly environment. This has led to emergence of new dimensions in workplace strategy with a need for amentisation and flexibility,” said Megha Maan,  senior associate director, Research at Colliers International India.

“In such a scenario, enterprises are looking towards flexible and agile workspaces. We note that flexible workspace operators are leasing large spaces, and even entire buildings in some cases, to cater to large space requirements from enterprises. Our survey and interactions with occupiers reveal that technology and e-commerce companies are more amenable to flexible workspaces. We expect some investment activity and deal closures by the end of 2019 or beginning 2020”, she said.

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First Published on Aug 30, 2019 11:34 am
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