The flexible workspace footprint across the top eight cities in India has touched 58 million square feet as of H1 2024, a joint report by Cushman & Wakefield and Table Space has said. Bengaluru led the way with a 31% share of the total flex space stock, followed by Delhi-NCR (16%), Pune (14%), Hyderabad (14%) and Mumbai (11%).
According to the report, the first six months of 2024 added over 5 million square feet of flex supply, continuing the momentum seen in the last two years where capacities grew by 8-9 million square feet each, growing at 23% in 2022 and 18% in 2023 respectively.
โWith the first half of 2024 already accounting for 70% of last yearโs total flex-space demand, we anticipate a potential record-breaking year for flex seat leasing,โ said Ramita Arora, Managing Director, Bengaluru and Head-Flex, India, Cushman & Wakefield.
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The report noted that the segment has witnessed 35-37% annual average growth rate in the last 3.5 years, with 4,50,000 seats leased during the period. This makes it the fastest-growing segment within commercial office real estate.
The report further highlighted that demand for flexible workspaces is also rising in Tier II and III cities, driven by workforce decentralization and the increasing emphasis on work-life balance. Flexible spaces now account for 11-13% of the total office space demand nationwide.
IT industry accounts for 40-50% of flexible workspace absorption
According to the report, both operators and occupiers have been transitioning towards the managed office solutions (MOS) model in recent times. It credited customised service offerings, shorter lease tenures and technological advancements enhancing productivity, for the feat.
A Cushman & Wakefield survey showed that there is a strong urge amongst occupiers to adopt digitisation of the workplace alongside other aspects such as superior facility management, employee well-being initiatives, and meeting their sustainability targets.
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Sectorally, the IT industry accounted for anywhere between 40-50% of seat absorption during the last 18 months (2023 and H1 2024), the report said. Other sectors such as engineering and manufacturing (14-18%), BFSI (9-12%), and professional services (11-12%) were also major contributors.
Incidentally, between 2021 and H1 2024, the flex segment has also witnessed a sharp growth in the number of active flex space operators, with the number growing to 300 as of today, the report noted. However, out of the 300-plus operators, the top 5% command more than 50% share in the Grade A flex stock, and a majority have managed office solutions as their core solution offering, it added.
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