Flexible work space practice likely to increase:JLL
As corporates return to the workplace, they are likely to leverage flexible space to reduce capital expenditure and create cost savings, while allowing for split teams and de-densification requirements. This increased demand from large enterprises will support the growth of the flexible space market to more than 50 mn sq ft by 2023, JLL’s Reimagine Flexspaces A 360⁰ has said. view
It is anticipated that flexible space will grow by an average of around 15-20 percent per annum over the next three-to-four years, Previously expected levels of new investment are unlikely to be seen, as operators look to solidify their existing operations and it is likely that certain operators will not be able to weather the storm, it said.
Developments that initially drove the growth of the flex market, like the focus on utilising workplaces to boost productivity and drive dynamic work cultures, enhance emphasis on employee health will continue to influence the next phase in India.
At present, Bengaluru and Delhi NCR together account for more than 50 percent of the flex space stock in India, with Bengaluru housing around 10.6 mn sq. ft. of such spaces. Hyderabad with 4.5 mn sq. ft. and Mumbai with 4.3 mn sq. ft. of flex office stock follow. According to JLL, Hyderabad and Pune are currently among the fastest-growing markets in the country.
“Flex space operators have changed the face of commercial real estate with their innovative offerings. This market is projected to grow at a steady pace throughout 2021 and beyond. Resultantly, the market penetration of flex spaces into total office space is likely to see a gradual increase from the current 3.0% to 4.2% by 2023,” said Ramesh Nair, CEO and country head (India), JLL.
“We expect this growth to continue, driven by demand, profitability and return-profile for investors, albeit at a slower pace resulting from the impact of COVID-19. Technology is advancing at an exponential pace and will play a major role in the future of workplaces. In this era, operators that utilize technology to enable the creation of a safer and better work experience will have a competitive edge,” he said.
“While the flex-space market more than tripled in the last three years, the momentum going ahead will be relatively slower. Players are likely to tread cautiously, and the overall market is expected to expand 1.5 times from the current size. At the same time, demand for flexible space is likely to remain resilient and we expect the size of the flex space market to cross 50 mn sq. ft. by 2023 led by increased demand from larger enterprises,” said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.