Mumbai: In India, the occupancy levels of flexible office spaces, also known as shared or flex spaces, have crossed 80 percent across major locations as IT companies drive the demand, a report said on Wednesday.
Prime office locations such as Mumbai (94 percent), NCR (92 percent), Bengaluru (86 percent) and Hyderabad (84 percent) continue to attract corporations, driving greater demand for flexible office spaces, according to the report by Knight Frank India.
To meet this burgeoning demand, flex-space operators have significantly increased their office space take-up, leasing an estimated 52.9 million square feet from 2017 to the first half of this year, with a robust CAGR of 22 percent, underscoring the rapid growth of the industry.
In the January–June period, flexible workspace operators leased 7.17 msf, a 6 percent increase compared with H1 2023. This accounted for over 21 percent of total commercial real estate transactions.
“With GDP growth projections for FY25 reaffirming India as the fastest-growing major economy, the demand for innovative office spaces is soaring,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
He added that occupiers are now looking beyond basic amenities to focus on employee well-being, a significant shift in workplace priorities, and flexible office space operators are well-positioned to meet these evolving demands.
Managed offices now constitute 65 percent of the flexible workspace market, while co-working spaces account for the remaining 35 percent.
The report said Coimbatore, Jaipur, Nagpur, and Mysuru are the top choices for expanding to tier 2 cities.
The IT sector, a dominant force in the flex space industry, is driven by the need for scalability, flexible lease terms, and a collaborative environment fostering innovation, particularly in tech hubs like Pune, Hyderabad, and Bengaluru.
The other services sector, including professional services, digital marketing, tourism, and creative industries, also has a strong presence in cities like Chennai and NCR.
The BFSI sector, while less dominant, favours flex spaces in financial hubs like Ahmedabad and Mumbai.
The report mentioned that manufacturing firms are increasingly utilising flexible workspaces for their administrative and managerial operations, particularly in cities with a strong industrial base.
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–IANS
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