India’s flexible office space is likely to see its market size increase 60 per cent to cross Rs 14,000 crore in the current fiscal year, due to a boost in rent charged by operators per desk and portfolio expansion, a report by Upflex India revealed.
The ‘Co-Working and Managed Offices Redefining the Indian Commerical Real Estate’ report by Upflex India, the platform for flexible workspaces, found that the annual co-working market size in terms of rental income is projected to rise to Rs 14,227 crore in 2023-24 fiscal year, against Rs 8,903 crore in the preceding fiscal year. Notably, the US-based Upflex India was brought to the country by real estate consultant Anarock. The report was released by WeWork India CEO Karan Virwani, reported PTI.
The report stated that the overall portfolio of flexible workspace operators climbed to 12.66 lakh in the reviewing period, against 10.4 lakh in 2022.23, where area-wise, the portfolio saw a boost to 57 lakh square feet from 47 lakh square feet.
The data revealed that the average price per seat per month rose to Rs 10,400 from Rs 9,200 per desk. At the same time, the occupancy level also climbed to 90 per cent, from 75 per cent in the period.
“The past couple of years have been transformative for India’s commercial real estate, and flex spaces have played a pivotal role in this monumental shift. The modern workforce is becoming increasingly mobile, largely due to the adoption of hybrid work models, and is fuelling a growing demand for flexible workspaces,” Virwani noted.
Upflex India CEO, Pratyush Pandey, stressed that in comparison to more than 400 operators with over 1,500 locations in nearly 55 cities in the pre-pandemic era, currently, there are more than 965 operators in about 2,320 locations spread across 90 cities.
Pandey stated that the move towards flexible workspaces in the country has potential. “As we navigate the evolving landscape of work, the paradigm shift towards flexible workspaces in India is indeed promising. The post-pandemic era has underscored the resilience of our workforce and the imperative for adaptable work environments,” he added.
The platform head further said that the growth of the market size can be credited to the boost in demand for hybrid working from corporates and large enterprises. “Corporates are consciously not investing into large spaces on their own as they now find it more convenient reaching out to managed office solution providers, enabling them to save on costs and increase flexibility,” Pandey noted.
The data further stated that the co-working sector accounted for 19 per cent of the overall commercial office leasing, as of June 2023. However, Upflex noted, that this figure is expected to grow to 25-27 per cent by the end of the current fiscal year. This growth is estimated to be seen in Tier 2 and Tier 3 cities as well, and not just stay limited to the metros, it added.
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