A recent report, “2024 India Office Occupier Survey,” has highlighted the number of companies utilising over 10 per cent of their office portfolio as flexible workspace is expected to rise significantly from 42 per cent in Q1 of 2024 to 58 per cent by 2026.
As per CBRE’s survey, given the increasing demand, flexible space stock will reach 80 million square feet by the end of 2024. In response to the growing workforce, occupiers are likely to expand into more office locations, potentially decentralising offices through a mix of traditional and flexible spaces.
The survey also showed a trend towards diversification in the office sector, with a preference for expanding portfolios across multiple cities. Factors such as a skilled workforce, improving infrastructure, cost-effectiveness, government support, and the benefits of exploring new geographies drive this trend.
Apart from major cities such as Bangalore, Hyderabad, NCR, and Mumbai, occupiers are particularly interested in expanding in Chennai and Pune. India’s strong economic growth is fueling investments across various sectors, leading to increased demand for diverse office space requirements. While gateway cities continue to see growth in office space demand, Pune and Chennai are witnessing a surge in both office leasing activity and new office space supply.
The survey highlights that about 30 per cent of occupiers plan to expand their use of flexible office space as their primary portfolio strategy within the next 12 months. Domestic occupiers show a higher preference for flexible workspaces compared to their American counterparts.
About 17 per cent of occupiers are looking to optimise their office portfolios by consolidating their offices into fewer locations. This strategy not only aims to streamline operations, but reduce costs associated with maintaining multiple offices.
The survey also indicates that nearly 70 per cent of occupiers intend to increase the size of their overall office portfolios in the next two years, aligning with their broader business trajectories, employee behaviour, and hybrid working policies. Approximately 73 per cent of domestic corporations and 78 per cent of global firms anticipate a portfolio expansion of 10 per cent or more over this period.
Furthermore, the survey highlighted sector-specific preferences for portfolio expansion. About 88 per cent of BFSI firms expect to expand their portfolios by more than 10 per cent, while 67 per cent of GCC firms and 53 per cent of technology firms share similar intentions.
Over the past five years, flexible space operators have become a dominant force in the Indian office-leasing market, consistently capturing over 15 per cent of quarterly leasing.
The survey also reveals that occupiers expect landlords to implement various measures to improve the office environment. Key focus areas include ESG initiatives such as EV charging infrastructure, health, safety and wellness certifications, green certifications, improved HVAC solutions for energy efficiency, fitness and wellness facilities, and enhanced employee experience.
Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, noted, “This upsurge reflects a heightened occupier confidence, driven by an expanding commercial office footprint and a growing demand for high-quality spaces. Moreover, the market has been buoyed by pent-up demand from businesses that postponed leasing decisions during the pandemic, further fuelling the current momentum.”
