July 13, 2023: Delhi-NCR has emerged as the third- largest city among the 20 Asia-Pacific region (APAC) cities with a flexible office stock of 8.4 million square foot (msf). According to a report by leading real estate consulting firm CBRE, Delhi-NCR overtook Beijing and Seoul in (Grade-A) flexible office stock in the APAC region.
Bangalore continues to top the list of APAC cities having the highest flexible stock ahead of 19 major cities, announced the findings of its report, says the report titled H1 2023 Asia Pacific Flexible Office Market.
As of March 2023, Bangalore recorded 12.9 msf flexible stock, highest among all major APAC cities. New flex space supply in Delhi-NCR and Bangalore accelerated from 2022, with the two cities witnessing the addition of a combined 3.1 msf of stock in Q1 2023.
With leasing by flex space operators remaining robust in Q1 2023, the pace of new flex centre openings over the remainder of the year in these two markets is expected to be brisk.
The other Indian cities that made it to the top 10 cities were Hyderabad and Mumbai, with 6.0 and 4.7 msf of flexible office stock, respectively.
“The Asia Pacific flex space market continues to display stable growth, with the total volume of flexible office space in the region reaching 87 million msf as of March 2023, an increase of 6% from September 2022,” says the report.
The report points out that the APAC region is home to approximately 3,000 flex space centers. Total flex stock in the region is based on 20 major markets in Asia Pacific.
With strong leasing activity by flex space operators during this period, it is anticipated that the pace of new flex centre openings will continue to be rapid throughout the remainder of the year in these markets.
According to the report, technology firms accounted for the largest portion of leasing activity, with a 35% share, followed by business services at 16%, finance firms at 12%, retail firms at 8%, and life sciences at 7%.
Ongoing economic uncertainty is strengthening the importance of portfolio flexibility and prompting a greater focus on cost management, driving occupier demand for flex space. CBRE’s 2023 India & Asia Pacific Occupier Survey found that more than half of respondents believe their portfolios to be under-allocated to flexible office space and intend to increase their use of it.
Anshuman Magazine, chairman & CEO-India, South-East Asia, Middle-East & Africa, CBRE, said: “In an environment of ongoing economic uncertainty, businesses are recognizing the value of portfolio flexibility and cost management. This has resulted in a heightened demand for flexible office solutions as occupiers seek agility and cost-effective options. The continued growth of the flex space market underscores its importance as a strategic choice for businesses navigating the evolving landscape of workspace requirements.”
The report also points out additional trends, including a preference for dedicated spaces such as enterprise solutions (69% share) due to concerns about capital expenditure. Furthermore, there is significant demand for event spaces (45% share) and access passes (43% share). These trends reflect the priorities and preferences of occupiers in the flexible office market.
CBRE APAC study covered 20 major Asia-Pacific markets, including Japan, China, South Korea, Philippines, Hong Kong, Australia, Vietnam, Singapore, Australia, Taiwan, New Zealand and India.
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