India Flexible Office Space Market - Growth, Trends, COVID-19 Impact and Forecasts (2022-2027)

Market Overview

India's Flexible Office Space Market is expected to grow at a CAGR of approximately 6% during the forecast period (2022-2027).

The outbreak of covid-19 leading to the government-mandated social distancing norms coupled with the nationwide lockdowns has impacted severely on workspace requirements, space management techniques as well as design guidelines for various flexible workspace operators. However, while a few short-term repercussions are inevitable, the long-term fundamentals of the sector remain sound and strong.

Flex space operators have changed the face of commercial real estate with their innovative offerings. this market is projected to grow at a steady pace throughout 2021 and beyond. Resultantly, the market penetration of flex spaces into total office space is likely to see a gradual increase from the current 3% to 4.2% by 2023. This growth is to continue, driven by demand, profitability, and return profile for investors, albeit at a slower pace resulting from the impact of COVID-19.

Developments that initially drove the growth of the flex market, like the focus on utilizing workplaces to boost productivity and drive dynamic work cultures, enhance emphasis on employee health, etc., will continue to influence the next phase in India.

At present, Bengaluru and Delhi NCR together account for more than 50% of the flexible office space stock in India, with Bengaluru housing around 10.6 million ssq ft of such spaces. Hyderabad with 4.5 million sq ft and Mumbai with 4.3 million sq ft of flexible office stock follow.While the flex-space market more than tripled in the last 3 years, the momentum going ahead will be relatively slower. Players are likely to tread cautiously, and the overall market is expected 1.5 times the current size. At the same time, demand for flexible space is likely to remain resilient and it is expected that the size of the flex space market to cross 50 million sq it by 2023 led by increased demand from larger enterprises.

Scope of the Report

Flexible workspace is also known as shared office space or flex space. This type of office space is fitted with basic equipment, like phone lines, desks, ad chairs, a setup that allows employees who normally work from home or telecommute to have a physical office for a few hours every week or every month. India Flexible Office Space Market is segmented By Type (Private Offices, Co-working Space, and Virtual Offices), By End User (IT and Telecommunications, Media and Entertainment, Retail and Consumer Goods, and Others), and By City (Delhi, Mumbai, Bangalore, Hyderabad, Pune, and Rest of India). The report offers market size and forecasts for India's Flexible Office Space Market in value (USD Billion) for all the above segments.

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Key Market Trends

Increasing Number of Startups and Freelancers in the Country To Drive the Market

The Flexible Office Spaces which was initially the go-to option for startups and freelancers has now become a prerequisite for SMEs. The biggest chunk of 10.3 million potential seats is ascribed to large companies. There is a qual divide of 1.5 million each amongst freelancers and SMEs.

Small and Medium Enterprises have been growing rapidly with over 63 million SMEs in the country currently rising at an average rate of 10%. SMEs contribute 45% of India's manufacturing output and ad to more than 28% of India's GDP. The current MSME employee base of 128 mn is expected to grow to 170 mn by the Current Year 2022. With renewed economic reforms by the government comprising of streamlining of labor laws. Ensuring digital integrations & creating SME/MSME-friendly policies, the SME segment cannot be overlooked by the business ecosystem in India any longer.

The smallest lot is formed by startups at 100,000 seats. With a substantial shift from traditional offices to flexible workspaces attaining widespread acceptance, more and more SMEs are embracing coworking due to cost efficiency. flexibility, teach integrations, superior infrastructure, enhanced productivity plug and play solutions, and networking opportunities. Thus, allowing them to concentrate on their fundamental business minus the hassle of managing real estate.

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