Office space leasing by co-working operators increased by 26 percent in 2019 at 10.8 million sq ft to cater to the rising demand for flexible workspace by start-ups, freelancers and corporates, according to property consultant CBRE.
The momentum is likely to continue even this year with leasing volume expected to be around 10-12 million sq ft.
CBRE today launched its report titled, ‘India Flexible Space Digest – 2019’which highlighted that the overall stock in the flexible space market increased from 19 million sq. ft. in 2018 to 30 million sq. ft. in 2019.
“In today's dynamic and technology-driven business environment, corporates are beginning to explore various workplace solutions which could result in CAPEX reduction and increased agility of their RE (Real Estate) portfolio in the sector.
“Given the overall performance of the sector, we expect the demand to remain steady with an overall stock of flexible space anticipated to cross 40 mn sq. ft. by the end of 2020,” said Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East, and Africa, CBRE.
During 2019, the report stated that Bangalore and Hyderabad accounted for about half of the flexible space take-up in India, followed by Delhi-NCR and Mumbai. The uptake in the flexible space leasing in 2019 was dominated by hybrid spaces and managed space (77%) followed by coworking and business centers (23%).
CBRE report said that the share of office space leasing by the co-working segment is expected to increase from about 14% in 2019 to 16-20% in 2020.
Elaborating on the future trend in coworking space, the real estate consultant said, the model of engagement and partnership between landlords, occupiers and flex operators would continue to evolve in 2020, with the use of flexible office space to become the preferred alternative solutions for occupiers. They’ll carry on to use the space as an active component of their overall RE strategy.
Demand in 2020 is likely to focus on user experience and agility. As part of this shift, employee engagement is expected to start emerging as a key driver of the occupier strategy.Landlords to allocate a portion of their RE portfolio to flexible spaces in both existing and upcoming developments, and to become more strategic to enhance the end-user experience.