Flex Spaces-Key to Expansion for Majority of Occupiers

Torbit- September 15, 2024

Large corporations are increasingly embedding flex space as a part of their real estate footprint and over 80 percent of occupiers plan to expand through flex spaces in the next 3-5 years.

Reimagination of the workplace, changing perceptions and enterprise-level offerings have been driving heightened flex adoption in recent years. These sentiments are echoed in the latest survey-based report of Colliers India, ‘Flex Spaces: Reshaping the New-Age India Office Market’ The report highlights that over three-fourths of occupiers prefer to expand their office portfolio through flex spaces in the next few years. This trend of higher flex space adoption is mainly led by its inherent advantage of adding flexibility to the real estate portfolio while providing sufficient room to manage costs. Benefits relating to enhanced productivity, spaces replete with tech & security features and sustainability only strengthen its business case. The growth in flex space endorsement is expected to be highest amongst multi-national companies (MNCs), with an anticipated 3-4X times rise from current levels by 2030.

With a significant rise in the share of flex spaces in Grade A office space demand and changing occupier preferences, flex spaces have solidified their position in the Indian office market. As occupiers disclose their future portfolio expansion plans, the survey trends in the report are indicative of a high growth trajectory for flex spaces in India in the coming years. For the purpose of this report, the survey spanned a varied spectrum of start-ups, MNCs and GCCs targeting senior management personnel including key decision makers in the areas of real estate, administration, corporate strategy, etc.

Key Findings

• About 60 percent of occupiers to have over 20 percent share of flex spaces in their office portfolios in the next few years. Moreover, about 30 percent of occupiers prefer to have more than 40 percent share.

• Over 80 percent of occupiers to expand their office portfolios through the adoption of flex spaces in the next few years

• About 60 percent of occupiers opine flex spaces are complementing real estate requirements, increasing flexibility and scalability of operations

• About 40 percent of occupiers envisage flex spaces as centers of core business operations

• As many as 77 percent of occupiers prefer relatively longer lease periods of more than one year.

• 45 percent of occupiers prefer core areas of major cities for office portfolio expansion

Source: Colliers

“With flex space offerings transforming from niche to mainstream, they are expected to increasingly define the contours of Grade A office space demand in India. As per the report, 60 percent occupiers are likely to have a flex share of 20 percent or more in their office portfolio over the course of next 3-5 years, up from the present 40 percent . Earlier flex spaces were predominantly occupied by start-ups. However, over the next few years, more than two-thirds of real estate expansion across occupier segments will be through flex spaces. Notably, over 80 percent of the expansion in technology, engineering & manufacturing and healthcare sectors, would be through flex spaces “, says Arpit Mehrotra , Managing Director, Office Services, Colliers .

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Sanjeev Kathuria Vinod Behl Chandra Rijwani Global Capability Centers (GCC) - SAT Vimal Nadar Colliers Arpit Mehrotra Manoj Bawan Amarjeet Pandey Prashant Pandey Swati Pandey Angad Singh Bindra Anshul Singh Biplab Biswas RAHUL BHALLA Jailal Singh Deepak Chawla Neha Bhatia Sylvine Sarmah Ajay Tomar Monu Singh Debarun Dasgupta