As work models evolve, demand for flex spaces peaks

While many in India Inc struggle to plan ahead amid global economic uncertainty, the operators of flex workspaces seem set for a bright year ahead.

Even as companies push their employees to return to the office after the worst of the pandemic, they are not keen on investing more in permanent workplaces. Many are also trying to cut costs amid global economic uncertainty and pushing for more flexibility as they expand to smaller cities or allow their staff to work from offices close to their homes.

“Uncertainty always benefits flexibility in any industry,” Shesh Rao Paplikar, co-founder and chief executive of BHIVE Workspace, told DH.

Sure enough, the demand for flex space leasing in India climbed to the highest in any year at 7 million square feet, led by Bengaluru and Pune, in 2022, according to a recent Colliers report.

The operators of flex workspaces typically offer short-term leases and compelling prices to occupiers — huge factors for firms trying to navigate a world of uncertainty.

“The key advantage of pricing in a flexible workspace is that you pay for what you consume,” said Meghna Agarwal, co-founder of flexible workspace provider IndiQube.

Coworking space operators got more validation when Chief Minister Basavaraj Bommai recently promised to unveil a support scheme for the sector in the forthcoming state budget.

While the flexible space has largely been catering to startups and smaller firms, studies have shown that even bigger ones were incorporating this option in their expansion plans.

A C-suite survey by Colliers and coworking space provider Awfis showed 77% of occupiers (medium and large enterprises at the end of lease period and seeking relocation options) were planning to incorporate flexible spaces in their portfolio.

“Flexible office spaces allow companies to adapt and stay competitive in a constantly changing business landscape,” said Dhanya Suresh, a project architect at Studio Chintala.

BHIVE’s Paplikar looked at flexible leasing as an umbrella category within the office real estate segment, with coworking spaces and managed offices as its main sub-categories.

Coworking offices typically include multiple clients in one facility, where the leasing term may range from 24 hours to a multi-year tenure.

Occupiers can sign up for a dedicated desk, cabin or an entire floor. Unlike the per-square-foot metric in traditional offices, space is leased out on a per-seat basis.

Managed offices are a notch lower on flexibility, with a longer lock-in period and higher minimum leasing requirement, but they are more tailored to suit the occupier’s demands.

Amenities such as a sports arena, breakout areas, snooze rooms, gyms, shopping outlets and ultra-modern cafeterias differentiate flex workspaces from traditional offices.

“We take up these large individual buildings, build out the common areas first and then the offices inside are completely custom-made for our clients,” explained Neetish Sarda, founder of workspace provider Smartworks.