Demand for flexible office spaces has hit new high notes post the pandemic, with major companies and businesses including the start-ups are now opting for co-working.
Latest ANAROCK data reveals that out of a net absorption of approx. 20.8 Mn sq. ft. across the top 7 cities in H1 2022, the share of co-working spaces stood at 20%. Back in H1 2021, its share was just 6% of net office absorption of approx. 9.33 Mn sq. ft.
In contrast, the share of IT/ITeS sector – India’s leading office demand driver – declined from 49% in H1 2021 to 36% in H2 2022. However, this decline is largely because many IT companies are now also preferring flexible spaces to regular office spaces.
Anuj Puri, Chairman ANAROCK Group, says, “A major factor driving demand is that these spaces are not concentrated in just the city centres or major employment hubs; they’re spread across different areas, including the housing-intense suburbs. Coworking spaces are now also operating out of malls and hotels across cities. Many large office parks are also housing coworking spaces. This helps companies to remain closer to their employees and offer them flexibility.”
Another advantage is that with flexible office spaces, companies can plug-and-play at the same cost rather than wrestling with office layouts and fit-outs. The lock-in period for taking up a regular office space is anywhere between 3-4 years. All these factors have also helped boost the demand for co-working spaces.
Backed by rising office space demand, average monthly office rentals are also seen to be rising across the top cities.
NCR and Hyderabad each saw a 5% rise in avg. monthly office rentals in H1 2022 compared to same period in 2021. Bengaluru and Pune each saw a 4% yearly rise, while MMR, Chennai and Kolkata witnessed a 2% rise each in avg. monthly rentals in this period.