I’ve got a theory: If you love your workspace, you’ll love your work a little more. - Cynthia Rowley
Cynthia Rowley is an American fashion designer who once highlighted the significance of operating in a sound and productive work environment. Her theory fits the present scenario as many large and established corporates are now looking forward to shifting from traditional to flexible workspaces.
The demand for fully managed spaces has gained momentum in recent years. If we compare FY 2021 to FY 2023, there’s a remarkable 3.2X growth in enterprise flex leasing. Enterprises are embracing managed workspaces as they prioritize agility and employee well-being. The dynamic nature of business today demands adaptable environments that can easily scale with changing needs. Managed spaces create a comprehensive office ecosystem, offering a plethora of services and amenities at value-pricing compared to traditional workspaces. This approach not only aligns with the modern corporate ethos but also makes the return to office (RTO) more appealing for employees.
An industry report pointed out that 56% of respondents are planning to have more than 10% of the total office portfolio as flexible spaces by 2025. This indicates that the demand for flexible and managed workspaces will continue to dominate the office space segment in the longer run. The same report disclosed that at least 47% of corporates are planning to increase the use of flexi spaces in the next year.
The Unprecedented Rise of Flexible Workspaces
The exponential rise in office leasing activity across different regions in India proves the sheer dominance of managed workspaces. An increase in RTO, hybrid model, and satellite offices have been observed in several sectors and domiciles, leading to a surge in commercial space leasing. Recently, JLL released a detailed co-branded report with Smartworks which highlighted the transformative growth of flex and managed workspaces in India. Below are some of the key elements of that report:
According to the report, 53 million square feet of total operational flex stock is shared among the top seven cities, including Delhi-NCR, Bengaluru, Chennai, Pune, and Hyderabad.
Currently, there are a total of 8,39,250 operational flex seats in India.
Bengaluru, Hyderabad, and Delhi-NCR have a 68% share in operational flex stock.
If we compare FY 2021 to FY 2023, there’s a remarkable 3.2X growth in enterprise flex leasing.
The thriving startup culture in India has shown promising results with an exceptional 10X growth in flex seats leasing recorded between FY 2021 to FY 2023.
Almost 90% of respondents indicate a preference for flex in any form; large corporates are looking forward to utilising more custom flex spaces.
The rising sway of flexible and managed office spaces demonstrates that the Indian commercial segment is evolving rapidly and will continue to expand in the future. Moving ahead, we will highlight some top reasons that are empowering the growth of flex spaces in India.
Flex workspaces offer corporations cost savings by eliminating the need for conventional and traditional office spaces. This reduces expenses related to leasing, utilities, and maintenance. Furthermore, flexible arrangements cater to remote and hybrid work models, optimizing resource allocation and enhancing financial efficiency.
Interest from Various Sectors
The IT sector has long dominated the campaign for flex space leasing operations. Currently, engineering and manufacturing, BFSI, edtech, fintech, e-commerce, and many other sectors are showing interest in leasing shared office spaces. According to a report by Colliers, Engineering & Manufacturing firms have witnessed a three-fold rise in Grade-A gross absorption. The second quarter of 2023 witnessed a significant surge of 21%, compared to 7% in the second quarter of 2022. Apart from Engineering & Manufacturing, Flex Spaces, BFSI, and Healthcare & Pharma are showing the intent to shift from conventional spaces to fully furnished managed offices.
The pan-India presence of flex office operators and thriving job markets in cities like Delhi-NCR, Bangalore, Hyderabad, Pune, Mumbai, and Chennai continues to remain strong. This strategic positioning can enhance brand visibility, attract top talent, and foster collaboration with other businesses, ultimately boosting the company's bottom line. With large MNCs and domestic corporates leasing office spaces, better work opportunities are sure to come.
Companies are now looking for shared office spaces not only in Tier-1 but also in Tier-2 cities with the aim of reducing costs, maintaining proximity, maximising opportunities, minimising attrition rates, and ultimately expanding the business model. Cities like Jaipur, Ahmedabad, Indore, and Coimbatore have emerged as the top hotspots across different industries. Hence, the need for flexible workspaces in Tier-2 cities is increasing day by day as authorities are taking effective measures to enhance the business ecosystem, under the hub and spoke model.
The need to consider and initiate sustainable solutions is now more than ever. Not just the authorities but even the investors, customers, and employees are demanding businesses to take responsibility and enhance their social and environmental footprint.
Since the majority of today’s workforce belongs to either Millennials or Gen Zs, companies are putting greater efforts to attract and retain the best talents. With concepts like flexible working, tech-enabled solutions and in-office amenities, corporates are elevating the office experience by moving into flexible office spaces.
The escalating impact of managed and flexible workspaces within the Indian commercial sector serves as a testament to its brisking evolution. This transformation shows no signs of slowing down as agility and innovation have become the core strategies for businesses. As we gaze into the future, it becomes clear that the trajectory of flexible workspaces will continue to rise. Furthermore, innovative workplace concepts and continuous tech enhancements will keep reshaping the office segment.