With the changing dynamics of present times, corporates have been compelled to review their requirements for office space more prudently than ever before. Certain industries have embraced the idea of work from home more easily and for a longer term, while some return back to work in a staggered manner, which means a steady return to the workplace. This return-to-work scenario has given rise to several perspectives within the industry.
One of the key expectations regarding office space requirements, keeping in view the tight revenue scenario on account of business constraints, is that the concept of multiple smaller offices spread across the city would be preferred over a consolidated office located centrally. This will help companies in de-densification of their current offices while adhering to social distancing norms. Additionally, these smaller satellite offices in various locations will be in the proximity of the residences of employees, thereby providing ease of commute to work. What works in the favour of this type of a model, is that it greatly reduces the overheads that come with having a large office in the more expensive central location of the city; and with multiple offices closer to residential areas, it reduces the travel time for employees. This has also given rise to the demand for flexible office spaces. Flex spaces are being considered as a suitable option as it gives business owners access to a fully equipped office premise without having to invest in a long-term lease commitment. Companies are seeking agile real estate strategies to lower monthly fixed costs and to either upscale or downscale their businesses smoothly. Flex spaces are providing just that - helping them with cost optimization and flexibility in rental contracts. Infact, traditional companies that were uncertain about shared workspaces, are also considering this as a viable option.
Having said that, flexible office spaces, too, have seen a change in their design, layout and the way they operate, all these brought about to ensure a safe and healthy environment for occupants. The pandemic did give rise to new styles of working that include flexible working hours, rostered shifts and satellite offices closer to homes. The workplace evolved from being functional to being more experiential, and meaningful. Fortuitously for the Indian market, flexible workspace had already made in-roads into the country’s office market and witnessed wide acceptance as a preferred mode of setting up office. The country’s office market has witnessed substantial supply addition in the past three years, leading the current market share of flexible workspaces in total office space to stand at around 4%, translating to office stock of 32 mn sqft. In 2020 alone, despite the many adversities, the share of flexible space operators was recorded at 11% of the total office space absorption across the key office markets.
2021 will see further transformation of flex spaces into smart dynamic areas as operators outfit their spaces with the latest technologies, new wireless devices and countless integration of space management software. These innovations are aimed at improving and simplifying the workplace experience. Flexible workplace design, too, will feature prominently, where the focus will be more on health and wellness, open areas and integration of smarter designs at the workspace.
The future of this segment, thus, remains positive as flexible workspace has earned itself a key position in the office market scenario today, chiefly by its willingness to offer various levels of real estate flexibility and preferences that works for both tenants and landlords.