In the single largest flexible office space transaction in the country, managed office space provider Smartworks has picked up 5.6 lakh sq ft space on lease in Pune’s Baner locality taking its portfolio in the city to over 1.4 million sq ft.
The firm is planning to invest Rs 150 crore to set up an 8,500-seat co-working hub in the new office, which is their third centre in Baner and seventh in Pune. Total tenure of this lease is 15 years.
With this, Smartworks’ total portfolio will increase to 31 centres and 70,000 desks across nine cities including Mumbai, Pune, Delhi, Hyderabad, Bengaluru, Chennai and Kolkata.
“It has been a high growth trajectory for us in Pune in the last three years. Our growth has been driven by customer requirements for flexible office spaces that support collaboration, innovation and productivity. This is the largest center in our portfolio and the flex office space segment…With clients eyeing distributed workspaces across locations to adapt to the new normal, we act as a catalyst to fulfil their growth ahead,” said Neetish Sarda, Founder, Smartworks.
The company has leased the space in a commercial project M-AGILE spread across 8 lakh sq ft, of which, Smartworks has leased majority area of 5.6 lakh sq ft. The project is already 40% pre-booked by information technology, IT-enabled services, banking, financial services and insurance (BFSI) and manufacturing companies and is scheduled to be operational in September.
The transaction for this largest flexible office space was facilitated by JLL India.
“Flex space stock in Pune has grown over four times from 0.7 million sq ft in 2017 to 3 million sq ft in 2021 and has always presented a huge growth opportunity…Going forward, we expect the flex space market in Pune to reach nearly 5 million sq ft by 2022, driven by increased demand from large enterprises,” said Sanjay Bajaj, Managing Director – Pune, Logistics and Industrial, India, JLL.
According to estimates, flexible office spaces are expected to grow by an average of around 15-20% per annum over the next three to four years. With the rise of options such as the work-near-home and hybrid model is expected to push the demand and penetration of co-working office spaces across key cities and even tier II locations.
Led by the rising demand from larger enterprises, this segment is likely to move towards 5% of total office stock, pushing its total market size to around 51 million sq ft by 2023.