As office tradition takes centrestage, companies are exploring various office fashions, and flex areas consequently have seen a spurt in demand. No longer is flex a short-term resolution however somewhat a complementary actual property portfolio technique to make sure that bodily actual property additionally retains tempo with the altering workplace house market dynamics.
As per a joint report by Qdesq and JLL, titled ‘Indian Office market: Recalibrating with Flex’, the combination enquiries for flex house witnessed practically a 2X Y-o-Y development for FY 2021-22. This translated to over 214,000 flex seats unfold over 15,000 distinctive leads as recorded by Qdesq throughout the main Tier I and II cities. In phrases of house (1 flex seat = 70 sq. ft of leasable space on a mean), this interprets to just about 15 million sq ft.
Also, attention-grabbing to notice is that the common deal dimension (variety of seat enquiries/variety of leads) has elevated by round 27% – from a mean of 11 seats in FY 2020-21 to a mean of 14 seats in FY 2021-22.
According to JLL, 90,200 + flex seats have been leased throughout the highest 7 cities by occupiers in FY 2021-22, which is a 2.5X development Y-o-Y. This reveals that demand for flex house has seen a big resurgence over the previous 12 months, pushed by enterprises looking for to create a extra agile actual property portfolio technique in an evolving hybrid work setting.
62% of the seats transacted have been taken up by way of the managed route, the place the flex operator was curating all the flex workspace as per the tenant’s wants. This outlines how flex is remodeling as per the wants of the market from a pure co-working set-up to a extra non-public workplace, managed house idea. This is reiterated additional with seat enquiries displaying a better demand for personal places of work (43%) in comparison with co-working set-ups (39%).
Delhi NCR leads in seat enquiries
Aggregate knowledge reveals that Delhi NCR leads in distinctive leads (variety of companies) in addition to enquiries for flex seats in absolute phrases. In reality, the highest 4 cities by way of seat enquiries – Delhi NCR, Bengaluru, Chennai, and Mumbai — collectively account for about 74% of the leads and 72% of the seat enquiries, respectively. Bengaluru is the main tech hub and together with Delhi-NCR kinds the 2 main start-up clusters within the nation and thus sees a big demand additionally coming from large tech companies and well-funded unicorns.
Flex seat enquiries up 17% Y-o-Y in Tier-II cities
Start-ups, SMEs, and corporations within the fintech and e-commerce segments specializing in rising financial centres and smaller cities for enterprise development and enterprises trying to faucet into the expertise pool of an more and more cell workforce are the mainstays of this rise in enquiries for flex seats in Tier-II cities, as per the report.
Chandigarh, Indore, and Lucknow are seeing strong traction for flex enquiries. In reality, there’s good traction throughout main Tier-II cities within the North, West, and South.
Bengaluru, Pune, and Delhi NCR collectively account for over 60% of the overall flex seats leased in FY 2021-22
More than half of the overall flex seats leased in FY 2021- 22 have been within the type of significant-sized transactions of 300 or extra seats. In absolute phrases, Bengaluru noticed round 25,000 flex seats leased, adopted by Pune with round 15,000 over the identical 12-month interval.
“The flexibility to expand or contract on-demand, shorter lease tenures, fully serviced, amenity-rich offices and being able to create workspaces of the future which act as magnets for returning employees and in the war for talent are key factors fueling the flex market growth. An increasing number of enterprises are expanding their usage of flex space in tandem with transformational changes with respect to remote work, mobility, and flexibility. We expect the flex footprint to grow to nearly 75 million sq. ft by 2025 from the current 40 million sq ft levels, riding the wave of enterprise demand for managed workspaces.” stated Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
MSMEs & Others’ class drive mixture enquiries, however enterprises from tech and start-up ecosystems driving precise seat take-up
As per the JLL-Qdesq report, mixture enquiries are pushed by ‘MSMEs & Others’ class throughout non-tech industries adopted by tech and startups. These three segments collectively account for 59% of the flex house enquiries. JLL’s knowledge on precise flex seat transactions reveals that enterprises throughout a large spectrum however led by tech and startups are actually driving conversations round demand for flex and even precise house take-up. Tech and start-ups collectively contribute 48% of the particular flex house take-up.
“Flex industry has grown drastically in popularity and adoption among Indian corporates of all sizes & scale, over the last few years. All forms of Flex – Coworking, Private managed office, and Hybrid on demand usage — are experiencing robust demand. Having said that, co-working stands out as the best fit and solution for sub 100 seats requirement which is 90% of the market. Enterprises have been re-evaluating the office strategy and return to work equations. All the cues leading to a phenomenon of employee-centric and productivity-driven office strategy. Furthermore, the things which are constantly being validated are “Flexibility, agility & Decentralisation,” stated Paras Arora, Founder & CEO of Qdesq.