CONTACT US
Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Grade A Flexible Workspace Supply Reaches 58 Million Square Feet across Top 8 Cities; Managed Office Solutions Accelerates Expansion

03/09/2024
  • Managed Office Solutions (MOS) emerge as a key driver of growth post 2020
  • H1 2024 adds 5 million square feet (MSF) of new flexible workspace supply, marking the highest-ever contribution of flex leasing to overall office space Gross Leasing Volume (GLV)
  • 4.5 lakh flex seats leased in India between 2021 and H1 2024, recording an impressive 35-37% annual average growth rate in the last 3.5 years; Bangalore leads with 43% of seat leasing share

 

Cushman & Wakefield, in collaboration with Table Space, today unveiled a report titled ‘From Flex to Managed - Evolution of the Flex Space Industry’. The report offers an in-depth analysis of the significant transformation in the flexible workspace segment in India over the past decade, driven primarily by the growing adoption of hybrid work models and Managed Office Solutions (MOS). These solutions, characterized by optimized capital expenditure, flexible leasing terms, and value-added services offered by flex space operators, have been pivotal in shaping this segment.

According to the report, the flexible workspace footprint across the top 8 cities reached 58 Million Square Feet (MSF), as of H1 2024 - constituting over 7-8% of India’s total Grade A office supply. The first 6 months of 2024 added over 5 MSF of flex supply, continuing the momentum of the last 2 years, where capacities grew by 8-9 MSF each, growing at 23% in 2022 and 18% in 2023 respectively.

The remarkable expansion of the flexible workspace sector between 2021 and H1 2024, with 450,000 seats leased, underscores its position as the fastest-growing segment within commercial office real estate. The segment has witnessed a remarkable 35-37% annual average growth rate in the last 3.5 years, and with 2024 having already reached nearly 70% of 2023’s leasing numbers - this year is likely to record a new high, highlighting the robust absorption trend.

The report further highlights the flex space inventory across the top 8 cities - with Bangalore leading the way with 31% of the total stock, followed by Delhi NCR (16%), Pune (14%), Hyderabad (14%), and Mumbai (11%).

The demand for flexible workspaces is also rising in Tier II and III cities, driven by workforce decentralization and the increasing emphasis on work-life balance. Flexible spaces now account for 11-13% of the total office space demand nationwide.

Managed Office Solutions as Key Growth Driver

According to the report, both operators and occupiers have been transitioning towards the Managed Office Solutions (MOS) model. The MOS model offers enterprises a suite of end-to-end customized service offerings based on their requirements and enterprises benefit from a 100% custom-built office which gives them the ability to control all sections of their workplace. Lease tenures are shorter as it provides flexibility to tenants and technological advancements at such offices helps in developing an office that greatly enhances productivity at work. According to a survey of occupiers conducted by Cushman & Wakefield India, who have chosen flex office solution in recent past, one of the main USPs of MOS service providers is the value-added services that they offer to enterprises. There is a strong urge amongst occupiers to adopt digitization of the workplace alongside other aspects such as superior facility management, employee well-being initiatives, and meeting their sustainability targets. MOS has been particularly appealing to global corporations with India being seen as an emerging GCC hotspot, with such customized spaces providing the ideal local real estate solutions.

In terms of the sectoral demand, the IT sector remains a dominant force, accounting for anywhere between 40-50% of seat absorption during the last 18 months (2023 and H1 2024). Other sectors such as Engineering & Manufacturing (14-18%), BFSI (9-12%), and Professional Services (11-12%) have also contributed significantly to the demand for curated offices in H1 2024.

Between 2021 and H1 2024, the flex segment has also witnessed a sharp growth in the number of active flex space operators, with the number growing to 300 as of today - characterized by the resurgence of small and mid-operators who captured a higher share of the market. However, out of the 300+ operators, the top 5% command more than 50% share in Grade A flex stock, and most of them have Managed Office Solutions (MOS) as their core solution offering.

Ramita Arora, Managing Director, Bengaluru and Head-Flex, India, Cushman & Wakefield said,

“The flex-space sector stands out as one of the fastest-growing segments in commercial real estate, with the supply take up currently accounting for ~13% of Grade A office leasing volume. With over half a million flex seats consumed in the last 5 years, a key shift is being witnessed in this segment, as occupiers increasingly seek tailor-made office solutions. Companies aiming to attract and retain talent in a competitive market, alongside the growing trend of returning to the office, are driving new leasing strategies. Managed office solutions are at the forefront of this evolution. With the first half of 2024 already accounting for 70% of last year's total flex-space demand, we anticipate a potential record-breaking year for flex seat leasing.”

Nitish Bhasin, Chief Sales Officer, Table Space said,

“At Table Space, our unwavering focus has always been on serving the unique needs of enterprises, which is why we've pioneered and championed the Managed Office Solutions (MOS) model from the outset. This report highlights the significant shift towards MOS as the key growth driver in the flexible workspace sector, reaffirming our enterprise-first approach. As the largest GCC enablement partner in India, we're proud to be at the forefront of this evolution, providing tailored, scalable, and high-quality workspace solutions that empower businesses to thrive in today’s dynamic and rapidly changing environment.”


About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.

recent news

main streets 2024.jpg
Delhi’s Khan Market is 22nd most expensive Mainstreet globally: Cushman & Wakefield report

Delhi’s Khan Market has once again solidified its status as a retail hotspot, ranking as the 22nd most expensive main street globally in Cushman & Wakefield’s Main Streets Across the World report.

Aditi Vij • 06/12/2024

PR 22-11 India Retail Card Image_.jpg
India’s Retail Set for Expansion: 55 Million Square Feet of Grade-A Malls Needed till 2027 to Meet Growing Demand, Says Cushman & Wakefield

The Indian retail sector is on the brink of a significant transformation, driven by rising domestic consumption and favourable economic conditions. According to Cushman & Wakefield’s latest report - Resurgent Retail: Powered by Rising Retail Consumption, unveiled at MAPIC India 2024, India requires a substantial increase in premium retail spaces to meet the growing demand.

Aditi Vij • 22/11/2024

PR - Supriya Chatterjee Card Image_.jpg
Cushman & Wakefield Appoints Supriya Chatterjee as Managing Director – North India

Cushman & Wakefield, one of the largest and fastest growing real estate services firm in India, today announced the appointment of Supriya Chatterjee as Managing Director, North India. 

Aditi Vij • 22/11/2024

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS