September 20, 2023: Flexible office space stock is estimated to rise 52% by 2025 to 81 million square foot (msf) with operators expanding their business to tap growing demand, according to a report by commercial real estate company Vestian. Flexible office space operators currently have 53.4 msf area under operations and the number is expected to reach 81 msf by 2025.
The report Flexing the Workspace-Back to Office highlights that over 7.6 lakh seats are available with flexible space operators spread across more than 1000 centres in India.
According to the report, Vestian CEO Shrinivas Rao said the flexible spaces sector is at a nascent stage in India compared to other countries such as the USA and European countries. The sector has grown gradually in India and flexible office stock has reached 53.4 msf. Furthermore, the stock is anticipated to reach 81 msf by 2025, growing at a CAGR of 23%, as COVID-19 catalysed the market growth. he said.
The report mentioned that wider adoption of flexible spaces in India started in 2015-16 when the market was fragmented and unorganised. However, it has since grown rapidly and become more organised. Flexible spaces are garnering significant attention not only from startups and SMEs but also from large enterprises.
Shrinivas Rao said,“Flexible space operators provide what occupiers are looking for – low cost, flexibility and technologically advanced spaces. While 2023 is likely to be a challenging year for businesses amid macroeconomic uncertainty and fear of recession, flexible spaces are a way to navigate global headwinds.”
As several companies return their employees back to office under a hybrid model, it is expected the demand for flexible spaces to rise. Furthermore, Vestian has projected that the flexible office sector would constitute around 25% of the overall office space absorption by 2025.
The report said that flexible office spaces broadly include dedicated desks, hotdesking, coworking spaces, serviced and managed office spaces. While coworking centres are at the most flexible end of the spectrum, managed offices would be at the less flexible end.
Further, the report mentioned that there are 50 major flexible space operators. The top 10 players hold 84% of the total flexible office space portfolio.
Prominent office areas such as Whitefield in Bangalore, Hitec City in Hyderabad, Baner in Pune, Andheri (E) in Mumbai, and DLF Cybercity in Gurgaon are popular with flex space operators and occupiers/tenants alike.
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