Pune’s flex space penetration highest, expected to cross 8 million sq ft by 2025: Colliers India

While Bengaluru remains the largest flex space market pan India in terms of size of flex stock, Pune has surpassed Bengaluru in flex space penetration (at 8.3 percent), according to the report.

Tech hub Pune’s flex space penetration is more than that of Bengaluru. It is expected to cross 8 million square feet by 2025, accounting for 10 percent of the city’s total office stock, according to a report by Colliers India, a real estate consultancy firm.

The report said this is due to healthy investment and robust demand from technology and other sectors.

Pune’s flex space market has seen significant growth during the last five years, especially post pandemic, led by a burgeoning young population, presence of large tech corporates, and proliferation of numerous startups, the report said.

According to Colliers India, since 2018, Pune’s flex stock has witnessed a four-fold rise and currently stands at 5.4 million sq ft as of June 2023. This translates to 8.3 percent of the total Grade A office space in Pune, the highest across the top six cities, according to the report.

While Bengaluru remains the largest flex space market pan India in terms of size of flex stock, Pune has surpassed Bengaluru in flex space penetration (at 8.3 percent).

“Pune’s share in pan-India flex leasing has increased manifold,  from 5 percent in 2018 to 25 percent in 2022. Flex spaces in the city are also seeing increased occupancy, as enterprise outsourcing has become mainstream,” said says Animesh Tripathi, Managing Director, Pune, Colliers India

“As flexibility, scalability, and cost optimisation remain table stakes for  office expansion, flex spaces will continue to gain prominence in Pune. A greater focus on quality, increased customisation, and amenitisation would  further justify a rental upside,” he added.

“After Pune,  Bengaluru has the highest flex space penetration of 7.3 percent. The tech sector remains the top occupier of Pune’s flex spaces, accounting for 43 percent of the  total seats between 2020 and H1 2023,” the report added.

Baner-Balewadi and CBD hold 75 percent of Pune’s total flex stock, while Viman Nagar and Kharadi are yet to see an increase in traction, the report added.

Flex spaces have a penetration of 6.1 percent in Hyderabad, 5.5 percent in Delhi NCR, 5.3 percent in Mumbai, and 3.6  percent in Chennai, the report added.