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Flex workspaces spread wings beyond tech occupiers

India’s flexspace industry has undergone transformational change over the past couple of years, replicating the trends in commercial real estate, enabling it to build a diverse occupier profile and strengthen its financials. While IT and ITeS companies dominated the adoption of flex workspaces in the country, the mushrooming of startups and the improving levels of financial inclusion are increasing the share of non-tech companies in adopting flex workspaces.

Reports, too, reflect this trend with the share of the IT/ITeS sector, which is India’s leading office demand driver, declining from 49 per cent in H1 2021 to 36 per cent in H2 2022 in flex space absorption. The share of the IT/ITeS segment fell from 27% to 33% in the third quarter of this year. At the same time, the banking and financial services sector posted impressive gains, with its share rising to 16% from 10% during the same period and followed by manufacturing and telecom, healthcare, and other real estate segments holding shares of 14% and 16%, respectively.

This widespread adoption across sectors is a testament to the efficacy of the flex workspaces, which offer numerous benefits, including low cost of operations for companies, seamless expansion, and consolidation of space to suit the changing nature of business and a suite of services essential for employers and employees.

 

Occupiers seek agility with flex workspaces

With most services going digital in the internet era, companies are scaling up rapidly and making quicker decisions to complement the growth. This necessitates the need for agility in operations. As real estate costs are one of the most significant investments for companies, flex workspaces offer a cost-effective solution for expanding their footprint at the click of a button. With technology-based platforms of flex workspace providers, companies can expand their presence across cities seamlessly and avail of the state-of-the-art services of premium office spaces, something which otherwise would incur considerable investments in the case of traditional office spaces.

This agility panned-out after the COVID-19 lockdowns, whereby an increasing number of companies joined hands with flex workspace providers to enable their employees to work out of their properties which acted as the satellite offices for occupiers across the country.

Expansion beyond metros enables the diversification of occupiers

As companies branch out to smaller cities along with the rise of the startup revolution, flex workspaces started gaining more traction, with both tech and non-tech companies taking up spaces to attract talent and enable remote work for their employees. What began as a metro concept is taking the shape of a pan-India phenomenon with smaller cities such as Indore, Jaipur, Ahmedabad, Kochi, Coimbatore, Nagpur, Lucknow, and Chandigarh witnessing the foray of flex workspaces companies. This is bringing more diversity to the occupier list of flex workspace providers, enabling the democratisation of flex spaces in India.

Bouquet of services attract occupiers across sectors

Flex workspaces offer various services apart from necessary operational requirements such as retail, transportation, refreshments and recreational space, which play an essential role in employee satisfaction, thus helping reduce attrition. Industry reports suggest that a vibrant and fulfilling working environment can enhance worker contentment and companies spend nearly 50% – 60% of operating expenses on such expenses. Companies can contain this expense through flex workspaces while ensuring significantly high employee satisfaction. From yoga to cricket and basketball, concierge services to desk deliveries, flex spaces enable a well-rounded experience for its members, taking away the onus of managing allied activities so companies focus on their core business.

As we look forward to the next decade of flex workspaces in the country, the sector will emerge as a pillar of growth for small businesses, the go-to destination for established enterprises seeking agility in operations and leading the transformation of the Indian commercial real estate industry.

 

(The author is Mr. Pratik Agarwal- Chief Business Officer- Smartworks and the views expressed in this article are his own)

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