NEW DELHI: Flexible workspaces across India’s six major cities are expected to account for 20% market share of the overall office space demand reaching 12 million sq ft by the end of 2022, surpassing the 14% share in 2019, according to a recent report by Savills India, an international real estate advisory firm.
The sector accounted for an 18% market share of the total office leasing activity witnessed in the first half of 2022.
With employees returning to physical offices, agility and flexibility has become the core of the real estate decision-making process. Consequently, strong traction is evident in co-working desks taken up by occupiers in H1 2022.
Co-working operators have leased over 75,000 seats in H1 2022, compared to 60,000 seats in 2021. Almost 75% of the demand for co-working desks in H1 2022 can be attributed to the three largest flex markets – 45% in Bengaluru, 20% in Pune, and 10% in Hyderabad.
Total flex seat demand is anticipated to reach a new high with 150,000 seats, an increase of 1.5X year-on-year in 2022, as per Savills India’s Research.
The report also highlighed that the average monthly rentals in India are expected to touch Rs 12,500 per seat by the end of 2022, a 13% year-on-year growth.
H1 2022 saw start-ups take up 13% share in flex seats while new age businesses such as FinTech, HealthTech, EdTech, RetailTech, etc. had a market share of 20% with a cumulative uptake of around 15,500 seats.
Almost 52% of flex space leasing has come from MNCs. In the age of hybrid and work from anywhere culture, MNCs are embracing co-working spaces to encourage employees to work in locations closer to their homes, while keeping a check on dynamic real estate requirements.
Interestingly, the average transaction size of co-working spaces is almost 53% higher than the average of other sectors from 2020 to H1 2022. The sector has already witnessed 35 transactions of 50,000 sq. ft. or more in H1 2022, exceeding the full-year big-ticket activity of 2021. The dominance of big-ticket transactions is also reflected in the number of desks taken up by large occupiers in co-working centers across the country.
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