Office space that solves short-term requirements
NEW DELHI: The overall flexible space take-up in India increased by 277% y-o-y to reach about 2.9 million sq. ft in Q1 2019, says leading real estate consulting firm CBRE South Asia Pvt. Ltd.
In its report titled INDIA FLEXIBLE SPACE QUARTERLY DIGEST– Q1 2019, CBRE says the data represented 70% increase on a q-o-q basis in flexible space take-up.
Flexible space, a relatively new term that CBRE defines as, is office space that solves uncertain, transient or short-term requirements. Indian flexible space market is one of the biggest across APAC.
Bangalore and Delhi-NCR were the largest markets for flexible spaces in India, accounting for more than half of the segment’s leasing in the country.
Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, said the consultancy expected the leasing quantum of this segment to marginally rise from about 7.1 million sq. ft. in 2018 to about 10 million sq. ft. by 2020. It will remain “high on the investor radar going forward”, he said.
Hybrid and managed spaces drove flexible space take up, commanding a share of 46% and 36% respectively in Q1 2019. Q1 2019 also witnessed flexible space operators shifting focus towards leasing medium to large-sized spaces across cities with both commanding a 47% share in the total leasing activity.
Ram Chandnani, Managing Director, Advisory and Transaction Services India, CBRE, said technology gave birth to the concept of ‘a liquid workforce’ and flexible space operators are anticipated to embrace it even further for the benefit of their actual customers. CBRE expects corporates to focus more on tech-related aspects of flexible spaces for optimizing space usage along with improving productivity and collaboration. “Employees at the same time would be more interested in digitizing amenities and value-add services,” Chandnani said.
OUTLOOK: CBRE expects established corporates to take up a larger number of seats as compared to start-ups. On the other hand, developers would emphasis on maintaining healthy levels of occupancy rates, by highlighting on customized services and incorporating tech for enterprise solutions. Also, different ownerships, company structures, offerings, funding mechanisms and prices and scale are currently preventing M&A activity hence, consolidation is likely to occur at a comparatively slower pace in the country.