Flexible workspace demand jumps two-fold to 90,200 desks in FY22: Report

Demand for co-working office space jumped over two-fold in the last fiscal year at 90,200 desks across seven major cities as flexible workspaces rose in prominence after 2nd wave of the pandemic

Demand for co-working office space jumped over two-fold in the last fiscal year at 90,200 desks across seven major cities as flexible workspaces rose in prominence after the second wave of the COVID pandemic, according to a joint report by JLL India and Qdesq.

Over 37,300 seats were leased out in the 2020-21 financial year across the seven cities.

The total demand for flexible seats stood at 2,432 in Kolkata, 8,284 in Hyderabad, 11,312 in Chennai, 12,500 in Mumbai, 14,900 desks in Delhi-NCR, 15,659 desks in Pune and 25,130 in Bengaluru.

In its report 'India's office market Recalibrating with flex', real estate consultant JLL India and co-working marketplace Qdesq attributed the growth in demand of co-working space to many factors, including flexibility for corporates and other occupiers to expand or contract on-demand.

Shorter lease tenures, fully serviced, amenity-rich offices are few other factors.

Out of the total flexible seats leased out in 2021-22, 62 per cent accounted for managed office space. In the preceding year, the share was 52 per cent.

"An increasing number of enterprises are expanding their usage of flex space in tandem with transformational changes with respect to remote work, mobility and flexibility," the report said.

More than half of the total flex seats leased in FY 2021-22 were in the form of significant-sized transactions of 300 or more seats. Bengaluru, Pune and Delhi-NCR together accounted for more than 60 per cent of the total seats leased out in this period.

On pricing part, the report mentioned that the average price for a dedicated seat ranges from Rs 6,300 to Rs 14,300 per month.

However, the pricing for premium flex centres in prime business districts and marquee office projects in cities such as Mumbai and Delhi go up to Rs 50,000 per seat per month and Rs 25,000-45,000 per seat per month, respectively.

The price in Tier 2 cities is in the range of Rs 4,000-6,800 per seat per month, which is similar to the flex seat costs in peripheral locations in some metro cities.

Giving details about the total size of the co-working segment, the report also highlighted that the country has nearly 3,000 co-working facilities across Tier 1 and 2 cities. There are now over 2,300 flex centres operational across the top seven cities, including smaller, unorganised players and mom-and-pop co-working facilities and fitted-out spaces being offered as flex options.

Bengaluru leads in terms of such centres, followed by Mumbai, Delhi and Pune.

Of the total operational flex centres in Tier 1 cities, 49 per cent are accounted for by mid to large-sized operators with at least three operational centres and a current cumulative footprint of 10,000 sq ft or more.

In fact, just the top 10 operators (based on total number of operational seats in Tier 1 cities), in terms of their space footprint, cumulatively have over 380 operational centres across the Tier 1 cities.

There are around 650 co-working centres in Tier-II cities such as Kanpur, Goa, Raipur, Bhopal, Visakhapatnam, Kochi, Chandigarh, Patna, Lucknow, Jaipur, Indore and Ahmedabad.

"Workplaces and working styles are undergoing a change, driven by experiences gleaned during a prolonged remote working period during the pandemic. Expectations from work and workplaces are evolving and employees are a big part of this shift," the report said.