Co-working operators driving office demand; share in total office leasing doubles in 7 yrs

Co-working operators have become a significant driver of office demand in India as their share in total gross leasing of prime workspace across eight major cities has jumped to 13 per cent now from 6 per cent in 2017, according to a report by Cushman & Wakefield and Table Space.

Real estate consultant Cushman & Wakefield and coworking firm Table Space on Monday released a joint report 'From Flex to Managed - Evolution of the Flex Space Industry'.

"The evolution of the flexible workspace category within the Indian commercial real estate market has been a story of rapid transformation driven by changing occupier needs. The category has grown rapidly over the past decade and is now firmly entrenched as one of the dynamic segments of Indian commercial real estate," the report said.

As of June 2024, the total Grade A footprint of the flex space operators across India's top 8 cities stood at 58 million square feet and this constitutes nearly 7-8 per cent of the overall prime office inventory.

Office space leased by flexible workspace operators has jumped from 6 per cent of pan India gross leasing volumes (GLV) in 2017 to around 13 per cent of GLV (gross leasing volume) by H1 2024.

Ramita Arora, Managing Director, Bengaluru and Head-Flex, India, Cushman & Wakefield, said, "With over half a million flex seats consumed in the last 5 years, a key shift is being witnessed in this segment, as occupiers increasingly seek tailor-made office solutions".

Nitish Bhasin, Chief Sales Officer of Table Space, said the report highlights the significant shift towards managed office solutions as the key growth driver in the flexible workspace sector.

Co-working firm The Office Pass CEO and co-founder Aditya Verma said, "This surge can be attributed to the end of work from home regime, shift to hybrid work by major corporations and formalisation of the Indian economy, which is bringing many new SMEs to the formal office".

He said the growth trend is likely to continue for several coming years, and flex absorption will touch 20 per cent of all commercial estate transactions in the coming two to three years.

Shesh Rao Paplikar, CEO & founder of Bengaluru-based coworking firm BHIVE Group, said, "As enterprises increasingly seek customised, flexible, and technology-enabled work environments, the managed office solutions model has emerged as a key growth driver in this sector".

Bengaluru-based co-working firm Urban Vault co-founder and CEO Amal Mishra said flexible office space is gaining popularity among both international and domestic corporations.

"Over the next five years, flexible office space is expected to hold a significant share in Grade A office offerings," he added.