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The overall flexible space take-up in third-quarter (Q3) of calender 2019, stood at 2 million square feet revealed CBRE South Asia in its report ‘India Flexible Space Digest – Q3 2019’.
In Q3 2019, Mumbai, Bengaluru and Hyderabad accounted for about 70 per cent of office space take-up. Bengaluru dominated the flexible space stock, followed by Delhi NCR and Mumbai. Flexible space penetration was the highest in Delhi NCR and Bengaluru; Mumbai and Pune displayed similar penetration patterns similar to Hyderabad.
Commenting on the report, Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, said “We expect that landlords will increasingly cater to occupier interest by providing space-as-a-service on demand. Given that the Indian flexible space market is one of the biggest across APAC, we anticipate that this segment will remain high on the investor radar as well. We thus expect flexible space leasing to be around 9 million square feet in 2019 and around 9-10 million square feet in 2020.”
Bengaluru dominated the flexible space stock with 7.8 million square feet, followed by Delhi-NCR and Mumbai, with 6.7 million sqaure feet. and 4.6 million square feet respectively. Flexible space penetration was highest in Delhi NCR (6.1 per cent) and Bengaluru (4.6per cent ), followed by Mumbai, Pune and Hyderabad at 3.7 per cent, 3.8 per cent and 3.5 per cent, respectively.
The number of small- to- medium-sized deals (20,000 - 100,000 square feet) rose from 49 per cent in Q2 2019 to 54 per cent in Q3 2019. However, the number of large-sized deals (exceeding 100,000 square feet) dipped from 14 per cent in Q2 2019 to 12 per cent in Q3 2019.
Ram Chandnani, Managing Director, Advisory and Transaction Services India, CBRE said, “On an average, deal sizes were larger in India as compared to APAC in Q3 2019. Q3 2019 also witnessed an increased inflow of funds with about USD 100 million of funding provided by angel investors / PE funds / debt funds. Going forward, it is expected that corporates will increase the share of employees using flexible spaces, likely to be fuelled by Gen Z / millennial preferences.”
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