In India, leasing of flexible workspace by corporates rose 59% between April and June of this year at 28,167 desks across eight cities as they are embracing managed office space amid uncertainties, according to Cushman & Wakefield.
Enterprises had leased 17,691 seats in coworking spaces in the first quarter across the following cities: Delhi-NCR, Mumbai, Pune, Bengaluru, Hyderabad, Chennai, Kolkata, and Ahmedabad.
In its latest report on India’s office market, Cushman & Wakefield said: “A lot of companies, including many global multinationals, have embraced the managed space concept leading to enterprise flex seat deals standing at 28,167 seats transacted in Q2-22.”
Anshul Jain, Cushman & Wakefield’s Managing Director of South East Asia and India, said the growth in office leasing indicates that the overall market fundamentals are really strong.
Jain expects demand to remain robust because of implementation of return-to-work policies and expansion plans by a lot of corporates.
Group Managing Director of South Asia and GCC, Nidhi Marwah, of leading coworking brand The Executive Centre said: “Workforce trends like the ‘Gig Economy’ and ‘The Great Resignation’ have proven that pay scale and cosmetic changes in policies are not enough to retain the Gen Z workforce.”
According to Marwah, organizations are still comprehending the needs of the new workforce and hence keeping workspace strategies fluid. This has resulted in higher absorption of flexible desks.
“Workforce strategies that are built to champion flexibility are a big draw. Multiple touch-points within the same city where employees can step into work, collaborate, and access required infrastructure are expected,” Marwah said.
Ankit Jain, Director & Co-Founder of Skootr, said corporate occupiers are looking for portfolio re-optimization and focusing on the concept of managed office spaces.
“We have been observing a significant increase in the number of queries for office as an outsourced service. Enterprises are looking out to lease and divest their office spaces to avoid unwanted long-term commitments and capital expenditures,” Jain added.
Consequently, the share of leasing of office space by coworking operators in the overall absorption number is now in double digits and is expected to increase even further.
As per the data, enterprises leased 10,386 desks in Bengaluru during April-June 2022, as compared to just 5,839 desks one year ago. In Hyderabad, leasing of flexible workspace by enterprises more than doubled to 5,611 desks from 2,565 seats between 2021 and 2022. Finally, Pune saw leasing of 5,721 desks in April-June 2022 compared to 5,049 desks in the same period last year.
WeWork India, Smartworks, CoWrks, The Executive Centre, Skootr, Simpliwork Offices, IndiQube, The Office Pass, and 91Springboard are major players among others in the coworking segment that includes managed office space.
When assessing the overall office leasing market, the Cushman & Wakefield report said that gross leasing and net leasing in the first half of 2022 calendar year grew by 71% and 108% y-o-y (year-on-year), respectively as compared to the first six months of 2021.
Demand was driven by healthy hiring outlook of corporates and implementation of return-to-work policies. Cushman & Wakefield noted that corporates are actively resuming their expansion plans which were earlier on hold due to the second and third waves of the COVID-19 pandemic.
The gross leasing of office space rose to 37.4 million square feet in January-June, from 21.9 million square feet in the corresponding period of last year.