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Tech, media, telecom sectors account for 19% of Grade A office space in Mumbai, 48% in Bengaluru

Flexible workspace now established as an occupier sector: Colliers Research

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Technology, media and telecom (TMT) groups now occupy about 18 percent of prime office space in Asian CBDs and flexible workspaces about 5 percent, says Colliers Research.

Technology and media have emerged as a major occupier sector in India. The TMT sector accounted for about 19 percent of Grade A office space in Mumbai and 48 percent in Bengaluru at the end of 2018, it said.

Flexible workspace operators have made particular inroads into Indian urban markets. As per Colliers Research, the sector accounts for 15 percent of total Grade A office space in prime areas of Bengaluru, and 12 percent in the NCR agglomeration, it said.

Finance and professional services have traditionally been the dominant occupier sectors in the central business districts (CBDs) of major Asian cities. Finance alone still represents 30 to 50 percent of total occupation of prime office space in most Asian CBD areas outside India and the Philippines where technology is more important. However, patterns of space occupation are changing, with the technology, media and telecoms (TMT) and flexible workspace sectors the key drivers of new demand in many cities over 2017 and 2018.

‘With the growth of flexible workspaces absorption, investors will have to evaluate the strengths/ durations of the underlying leases that these operators are signing with tenants to assess risks that they could inherit in case there is a slowdown in the tech/start-up space. Currently, there is a cap rate premium being provided for assets which have some of the space occupied by any Tier I flexible space providers and we see that continuing in the immediate future,” says Joe Verghese, Managing Director at Colliers International India.

Not only are occupier profiles changing, but also are patterns of workplace organisation and design. Offices are increasingly laid out on open-plan activity-based or agile working principles, while occupiers, in general, are demanding flexibility, the efficiency of space use and enhanced ambient experience as tools to staff retention for a more mobile and typically younger workforce.
First Published on Mar 11, 2019 07:31 pm
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