World's Fastest Growing Economy is Leading the Race in Flexible Work Spaces across Asia, Here's Why
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With the growing startup ecosystem in India, the demand for flexible co-working space has grown by leaps and bounds in a few years. Not just startups, but also the established businesses are betting high on co-working spaces in different regions. The trend of working in flexible office spaces has now become all rage with the kind of facilities co-working space are providing in the market.
Flexible spaces have grown rapidly in recent years, reaching a total footprint of under 40 million sq. ft. across the Asia Pacific by H1 2018. A recent CBRE South Asia report found out that with the recent wave of rapid expansion, flexible spaces account for about 1.7 per cent of the total office stock in APAC currently. Among which, India stood at number 1 position in the APAC region where flexible spaces account for more than 3 per cent of the overall office stock.
“The growth can be attributed to the expansion of domestic operators, which currently account for about 60% of the total flexible stock,” said Ram Chandnani, Managing Director, Advisory and Transaction Services India, CBRE.
Domestic Players are Spreading Rapidly
Domestic operators account for about one-sixth share of the market with 68 per cent of India’s flexible office space stock. The top cities that are pushing the growth include Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune and Kolkata.
The metropolitan city that is getting a major number of global players expanding India in Mumbai. While speaking what is attracting global players in India market, Chandani said, “A closer look at the share of domestic players in flexible spaces across cities underlines the above trend – with the exception of Mumbai, where a prominent global player has recently opened several large-sized centres across the city.”
The overall stock of flexible space in the country has increased by about 50 per cent, from almost 10 million sq. ft. in 2017 to about 15 million sq. ft. by Q3 2018. Bangalore and Delhi-NCR were the largest markets for flexible spaces in India, with a combined share of almost 55 per cent, the report said.
The report noted that the leasing activity by the flexible office operators has increased rapidly in cities like Delhi-NCR, Bengaluru and Mumbai.
Space take-up by flexible space operators during 2016 was estimated to be about 0.6 million sq. ft. across cities. However, this more than quadrupled to about 3.5 million sq. ft. in 2017, said report.
The share of flexible spaces as part of total office absorption also doubled from 5 per cent in H1 2017 to about 10 per cent in H1 2018. Overall space take-up by flexible space operators is expected to touch 5.4 mn sq. ft. by the end of 2018, the report added.