The flexible working space constituted about eight percent of the total absorption (3.42 million sq ft) in 2017 as compared to three percent share in 2016. According to a report, Bangalore remains the dominating market with almost 32 percent share of the overall flexible workspaces pie in 2017, followed by Mumbai with almost 18 percent share.
“We can say that 2018 is likely to be an active year in the flexible workspace sector, fueled by an increase in end-user demand from the IT industry. It is looking for ways to mitigate real estate costs and seeking flexible solutions. By avoiding long-term leases and the flexible workspace sector, occupiers across the market are seeking to minimise risk and are set to be the beneficiary of this uncertainty” asserted Senior Director, Office Services at Colliers International India.
The flexible workspace operators amounted to 1.1 million sq. ft., approximately seven percent of Bangalore’s total office market absorption, in 2017.
Bangalore remains the largest market for flexible workspaces in India and has the largest share of technology start-ups. Initially characterised by domestic operators, the market now has a more diverse range with international entrants including WeWork, The Executive Centre and Regus.
With approximately 23 percent of the flexible workspace operator transactions for the year, the CBD has remained one of the preferred locations. Other notable districts were SBD (28 percent) and Koramangala (18 percent). Despite being the technology hub of Bangalore, Outer Ring Road (ORR) had a share of only four percent, says the report.
Mumbai too is quickly catching up with Bangalore in the flexible workspace market. Occupiers in Mumbai are embracing the trend for the flexible workspace to cater to this increased demand, and various local operators have expanded at a rapid pace, fuelled by external investment.
Mumbai’s traditional CBD, Nariman Point, accommodates relatively small flexible workspace locations and most operators are planning to concentrate on the new financial hub of the city, BKC, and surrounding areas. The take-up by flexible workspace operators in Mumbai increased from 380,000 sq ft in 2016 to more than 600,000 sq. ft. (0.6 million sq. ft.) in 2017. In 2017, flexible workspace accounted for 12 percent of the total market take-up and remains concentrated in SBD locations such as BKC, Andheri and Worli, says the report.
The trend is expected to continue in 2018 due to the restricted supply in key markets in Mumbai. Companies such as iKeva and Avanta have recently announced expansion plans. Major operators present in the Mumbai market are a mix of international and domestic names including WeWork, Regus, Awfis, Avanta Business Center, Innov8 and Ikeva.
A Senior Executive Director, Mumbai & Developer Services at Colliers International India aserted, “Currently flexible workspace operators have a strong presence in major commercial hubs such as BKC, Andheri, Powai, Vikhroli and Lower Parel. While their footprint has increased tremendously in the last year it has been confined predominantly to these locations. However, we expect growth in 2018 to occur across all micro-markets.”