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India leads in flexible space markets across APAC-CBRE
CBRE South Asia Pvt Ltd – India’s leading real estate consulting firm – on Thursday announced the findings of its latest report titled ‘Flexible Space’ Tenant Survey – 2018.
By
migrator
migrator
New Delhi
According to the report, the overall stock of flexible space market in India (including all seven Indian cities) increased by about 50 per cent, from almost 10 million sqft in 2017 to about 15 million sqft by Q3 2018, making it among the biggest markets in the APAC region.
Bengaluru and Delhi-NCR were the largest markets for flexible spaces in India, with a combined share of almost 55 per cent in overall leasing by flexible space operators. The report also highlights that flexible spaces account to approximately 1.7 per cent of total stock in Asia-Pacific; Shanghai and Delhi-NCR are the only two cities where flexible space share is more than 3 per cent of the overall office stock.
Leasing activity by flexible space operators quadrupled from 2016 levels to about 3.5 million sqft in 2017. More than 80 per cent of the leasing by flexible space operators was witnessed in the top three cities of Delhi-NCR, Bengaluru and Mumbai. Moreover, the share of flexible spaces as a part of total office absorption has also doubled from 5 per cent in H1 2017 to about 10 per cent in H1 2018.
Anshuman Magazine, Chairman, India and South-East Asia, CBRE, said “Originating as a shared service for start-ups, flexible spaces are now being utilized by established corporates as well to make their portfolios more agile amid a dynamic business environment. Given that the Indian flexible space market is one of the biggest across APAC, we anticipate that this segment will remain high on the investor radar as well. We expect that the leasing quantum of this segment would rise from about 5.4 million sqft in 2018 to about 7-9 million sqft by 2020.”
The survey also indicated that respondents had varied responses towards working from flexible spaces, depending on the sectors they belonged to. For instance, BFSI corporates, under heavy regulations for data privacy/security, are currently in the early stages of incorporating agility in their office portfolios. Comparatively, corporates belonging to consumer goods and technology are at a more advanced stage as they are more open towards operating from flexible spaces.
The survey also indicated that over 60 per cent of tech, media and e-commerce respondents gave access of flexible spaces to all management levels; as opposed to only 20 per cent of BFSI respondents.
Ram Chandnani, MD, Advisory and Transaction Services India, CBRE, said, “As employees are keen on the percolation of flexibility to all aspects of work, it is evident that flexible spaces are here to stay. The optimism of flexible space operators is being fueled by the rising interest of established corporates in this segment. We anticipate that this trend would continue, given the willingness of operators to customise offerings and prioritise member loyalties.”
“Flexible space operators are anticipated to become more attuned to the latest tech, which could benefit both corporates and employees,” he added.
FLEXIBLE SPACE STATS
- Overall stock of the country increased by about 50 per cent from 10 million sqft in 2017 to around 15 million sq ft by the end of Q3 2018
- Bengaluru and Delhi – NCR were the largest markets for flexible spaces in India, with a combined share of almost 55 per cent in overall flexible space stock
- More than 80 per cent of the leasing by flexible space operators was witnessed in the top three cities of Delhi-NCR, Bengaluru and Mumbai
- The share of flexible spaces as part of total office absorption also doubled from 5 per cent in H1 2017 to about 10 per cent in H1 2018
- As of H1 2018, flexible spaces account to approximately 1.7 per cent of the total office stock in Asia Pacific; Shanghai and Delhi-NCR were the only two markets in the region where flexible spaces account for more than 3 per cent of the overall office stock
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