Absorption of flex spaces by enterprises expected to reach a record high in 2024

The absorption of flex spaces by domestic and foreign enterprises is projected to peak in 2024, with 106,554 seats leased in the first half of the year compared to 155,000 for the entire year in 2023. This sector has experienced a 35% CAGR since 2021. According to a joint report by Cushman & Wakefield and Table Space, the flexible workspace footprint across the top 8 cities reached 58 million square feet (MSF) as of H1 2024, accounting for over 7-8% of India’s total Grade A office supply. The first six months of 2024 alone saw the addition of over 5 million square feet of flex space, continuing the growth trend of 8-9 MSF increases in the previous years, with growth rates of 23% in 2022 and 18% in 2023.

The demand for flexible workspaces is also rising in Tier II and III cities due to workforce decentralization and a greater emphasis on work-life balance, with flexible spaces now representing 11-13% of nationwide office space demand. The shift towards Managed Office Solutions (MOS) is a key growth driver, offering enterprises customized services and fully tailored office environments with shorter lease tenures. Chief Sales Officer at Table Space, Mr. Nitish Bhasin, highlighted that active flex space operators grew to 300 between 2021 and the first half of 2024, with small and mid-sized operators capturing a significant market share. However, the top 5% of operators dominate over 50% of the Grade A flex stock, most of whom focus on MOS as their primary offering.

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