Indian Economy News

Tech companies lead way with 50% of total flex space in India: Report

Businesses in India, led by technology companies, are turning to flex space, which is typically built-to-spec office space with a shorter lease than traditional office sites, as their international counterparts put off decisions on where to rent workspaces.

Prior to the Covid-19 pandemic that caused offices to become deserted as workers shifted to working from home, the share of flex space in occupiers' total portfolio increased from 5-8% in 2019 to an estimated 10-12% in 2023. The majority of flexible space is occupied by technology companies.

As the era of easy money came to an end and the war in Ukraine raged on, businesses in the West were forced to put off decisions about leasing office space due to the threat of a recession brought on by high inflation.

Flex space penetration in India was 6.5% as of the first quarter of 2023 and is still growing, driven by occupiers' rapid adoption of a hybrid and decentralised work strategy in an effort to create modern workspaces at the lowest possible cost.

According to the Colliers report, flex space penetration in other markets in the Asia Pacific region has increased only slowly, hovering between 2-4%.

In India, technology occupiers currently make up over 50% of the total flex space across Chennai, Delhi-National Capital Region, Pune, and Hyderabad.

Other major sectors that are actively embracing a hybrid model through flex space include engineering, manufacturing and Banking, Financial Services, and Insurance (BFSI).

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.