Flexible workspaces, especially managed office spaces are set to pick-up post Covid. While it may get concentrated in city centres (CBD), suburbs are also expected to witness companies consolidating their offices.
“Flexible office spaces, a global mega trend, is expected to be balanced by de-densification (moving to suburbs) trends. It is mainly driven by 10-15 percent of the corporate demand,” Juggy Marwaha, CEO of Prestige Office Ventures, told BusinessLine .
“The office space demand will continue to be present in both CBDs and suburban regions in the cities of Bengaluru, Pune, Mumbai and NCR as corporates are likely to have a hub and spoke model,” he added.
CBDs continue to attract tenants as CBD office spaces tend to have better infrastructure and talent availability.
According to Anuj Puri, Chairman, Anarock Property Consultants, “Advantage to companies moving from CBD to suburbs is that rents tend to be cheaper in the suburbs, and it is also usually possible to get larger floor plates and often even better facilities in newer buildings. This makes select suburbs ideal for consolidation.”
“While the CBD has been the preferred workplace for select companies based on their business specific needs in terms of location, visibility, customer preferences, employee demographics etc, there are companies who can operate from the suburbs as well as these factors do not affect their operations in a real sense,” explained Subrata KC Sharma, Chief Operating Officer- Commercial, Brigade Enterprises Limited.
He further added that the suburbs offer these companies several advantages in terms of new age spaces, larger campuses with better amenities, flexibility to expand or consolidate, and synergic and affordable social infra all at varying rentals, a majority of which is lower than CBD rentals. The suburbs also offer freedom from traffic along with cheaper and better housing options for employees.
Karan Singh Sodi, Managing Director - Mumbai Metropolitan Region, JLL, explained that moving from CBD to suburbs, there are two distinctive advantages. “Financial advantage - a clear rental arbitrage that is derived by moving to a suburban location. This could easily range between 45 to 60 percent. This can further extend if the capital expenditure for existing furniture and fittings has been written down in totality. Non-tangible benefits are like a large pool of talent residing in peripheral/suburban locations hence there is a direct correlation to increased employee productivity given significant reduction in travel time,” he added.