Breaking Boundaries: Pune’s Unprecedented Flex Space Expansion

The seeds of cultivation are in every culture, but it is city life that brings them to fruition – Susanne Katherina Langer 

Pune is a thriving metropolis which is located in the western state of Maharashtra. The city boasts a unique blend of culture and modernity, making it an attractive destination for businesses of all sizes. Often referred to as the “Oxford of the East”, Pune has gradually become an ideal location for large, medium, and even growing corporations. Its commercial real estate market has witnessed a massive surge in the last five years which has also elevated the demand for flexible office space in Pune. A recent report from Colliers revealed that Pune has the highest growth in the flex space segment in India. Baner-Balewadi and CBD are the hotspots of the city as they hold almost 75% of Pune’s total flex stock. 

This increased demand for managed office space in Pune is the result of proximity to residential catchments, availability of skilled professionals, and presence of premium corporate arenas. Over the next three years, Pune’s flex space stock is expected to cross 8 million sq ft with 10% of total office space. 

Pune’s Flex Space Landscape: Embracing Sectoral Diversity  

While Pune has gained recognition for its support of IT-based companies, it has progressively embraced a broader spectrum of business domains. With 43%, the technology sector remains the top occupier of flex spaces. At the same time, engineering and manufacturing constitute 27%, logistics 7%, consulting 5%, and other sectors 18%, all contributing to the evolving landscape of flexible workspaces in Pune.  

The city’s real estate market is adapting to accommodate the varied demands of these expanding sectors. In line with this diversification trend, Pune is expected to witness this transformation in its commercial landscape.   

As we proceed, we will discuss the prominent elements that make Pune a preferable destination for flex and managed workspaces. 

4 Pillars that Constitute a Favorable Ecosystem for Flex Spaces in Pune 

The robust economic growth and diversification of industries, including information technology, engineering & manufacturing, logistics, and others are escalating the demand for flex & managed office space in Pune. The credit for a 4X rise in average transactions since 2018 goes to the city's affordable, stable, and reliable ecosystem for entrepreneurs. As of Q2 2023, Pune has the highest flex space penetration in Pan India at 8.3% followed by Bangalore at 7.3%. 

Coming back to the focal point, let's discuss the major factors that attract businesses to lease flexible office space in Pune. 

1. One of the largest IT hubs in India 

2. Ranked among the top 100 startup regions in the world 

3. An affordable city for living & business 

4. Agility in flex – a major advantage over traditional workspaces 

 

1. One of the largest IT hubs in India  
   Alongside Bangalore, Delhi-NCR, and Hyderabad, Pune ranks among the top 5 major IT hubs in India. The city is home to many prominent IT players including Tata Consultancy Services, Wipro, Infosys, Cognizant and more. Currently, Pune is employing about 4 lakh IT professionals, which clearly demonstrates the dominance of the IT sector in the city.  
    
   Post-pandemic, these advanced concepts have been instrumental in enabling new workspace solutions such as satellite, managed, and hybrid office spaces. The top operators have expanded their portfolio over the last two years allowing businesses to unlock their true potential by moving into these advanced workspaces.  
    

2. Ranked among the top 100 startup regions in the world 
   Pune has emerged as a thriving hub for IT as well as new-age ventures from different domains. In recognition of its growing dominance in the startup landscape, Pune has secured the 78th position in the Global Startup Ecosystem Index. This achievement is a testament to the city’s supportive infrastructure, prestigious educational hubs, and dynamic business environment.  
    
   As the startup ecosystem continues to expand, the demand for flexible office space in Pune is expected to rise in the coming years.  
    

3. An affordable city for living & business 
   Pune also comes in the list of the most affordable cities in India for both residential and commercial purposes. It is an attractive sub-dollar market for corporates with approximately 50% lower average office rentals than Mumbai. With its improving infrastructure and superior quality of living at affordable costs, the city is ranked 2nd in the ease of living index. This peculiar blend of economic advantages, paired with a high quality of life, makes Pune a compelling choice for those seeking a thriving urban environment that doesn’t strain the wallet. 
    

4. Agility in flex – a major advantage over traditional workspaces 
   The concept of flex and managed workspace has transformed the entire commercial real estate segment in a very short span of time. Currently, their entire focus revolves around delivering a variety of solutions to occupiers, allowing them to create balanced strategies that suit their workstyle set-ups. Unlike traditional workspaces, factors like cutting-edge amenities, locational convenience, cost control, scalability, ease in customisation and IOT-enabled workspaces are captivating for businesses to lease managed office space in Pune. 

 

In conclusion, the rising demand for managed office spaces in Pune marks a pivotal shift in the city’s CRE landscape. Businesses are recognising the benefits of flexibility, scalability, and new-age amenities, and the appeal of flex and managed workspaces continues to soar. Hence, it’s clear that this trend in Pune is not merely a passing phase but a strategic move towards the future of work.