Flexible workplace operators lease 52% more office space in Jan-June at 4.6 mn sq ft: CBRE

Office space leasing by companies providing flexible workplace rose 52 percent to 4.6 million sq ft during the first half of this year across seven major cities on rising demand for such space from startups and corporates, according to property consultant CBRE. The leasing of office space by such operators stood at 3 million sq ft in January-June 2018 and 8.3 million sq ft for full last year across seven cities namely Delhi-NCR, Bengaluru, Mumbai, Chennai, Hyderabad, Kolkata, and Pune.

Flexible workspace has been classified as business centers, co-working, managed office spaces and hybrid spaces. "The overall flexible space take-up in India reached about 4.6 million sq ft in H1 2019. During this period, Bengaluru accounted for almost 30 percent of the leasing by flexible space operators," CBRE said in a report 'India Flexible Space Digest - H1 2019'.

The total stock of flexible workspace has reached 23 million sq ft. "India is currently one of the leading flexible space markets in APAC and we expect increasing investments in this segment going forward. Office stock is expected to grow from 600 million sq ft in mid-2019 to a billion sq ft by end of 2030 and flexible space will comprise 8-10 percent of the total office stock," said Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East, and Africa, CBRE.

As per the report, the number of small-to-medium-sized deals (20,000-100,000 sq ft) rose from 52 percent in January-June 2018 to 61 percent in the same period of 2019. Moreover, the number of large-sized deals (exceeding 100,000 sq ft) increased from 6 percent to 13 percent year-on-year in the first half of this year. "Customized enterprise solutions provided by operators offer a competitive advantage as well as enable them to retain tenants for a longer-term. This is expected to continue to attract established corporates towards the flexible space segment," said Ram Chandnani, MD, Advisory and Transaction Services India, CBRE.

The consultant highlighted that co-working operators are now also focusing on tier-II cities such as Jaipur, Chandigarh, Lucknow, and Goa.