Flex spaces are expected to account for 20 per cent of total office space demand in 2022, with demand reaching 12.0 million square feet by the end of 2022. In 2019, it held 14 per cent of the market share in the commercial sector, according to Savills India.
The segment will continue to drive a strong resurgence of commercial real estate in six major cities. In HY1 2022, the sector accounted for 18 per cent of total office leasing activity.
“As businesses evolve, shared spaces will continue to provide organizations a chance to design a highly fluid commercial real estate portfolio as per their business strategies. Real estate cost optimization and explosive growth in hybrid work are likely to be the driving factors for coworking sector growth in Tier II and III cities,” said Naveen Nandwani, MD-Commercial Advisory and Transactions, Savills India and head- of Workthere India.
The report states that operators leased more than 75,000 seats in H1 2022, up from 60,000 seats in H1 2021. Almost 75 per cent of the demand for coworking desks in H1 2022 can be attributed to the three largest flex markets: 45 per cent in Bengaluru, 20 per cent in Pune, and 10 per cent in Hyderabad. In 2022, total flex seat demand is expected to reach a new high of 150,000 seats, representing a 1.5X YoY increase.
According to the report, the weighted average per seat rental has a positive correlation with the country’s demand for managed spaces. With a healthy coworking sector traction expected for the rest of the year, average monthly rentals in India are expected to reach ₹12,500 seats by the end of 2022, representing a 13 per cent YoY increase.