This translated to over 214,000 flexible office seats spread over 15,000 unique leads in major tier I and II cities across India. In terms of space, with 1 flexible office seat occupying an average 70 sq ft of leasable area, this translates to nearly 15 million sq ft, showed a JLL India-Qdesq analysis. Over 90,200 flexible office seats were leased across the top 7 cities by occupiers during the year which is a 2.5times on-year growth.
This indicates the demand for flex space has seen a significant resurgence over the past 12 months, driven by enterprises seeking to create a more agile real estate portfolio strategy in an evolving hybrid work environment. Interestingly, the average deal size has also increased by around 27% to an average of 14 seats in 2021-22. Over 62% of the seats transacted were taken up through the managed route, where the flexible office spaces operator was curating the entire flexible workspace as per the tenant needs.
This outlines how flex is transforming as per the needs of the market from a pure coworking set-up to a more private office, managed space concept. This is also reiterated further with seat enquiries showing a higher demand for private offices at 43% compared to coworking set-ups at 39%. The top four cities—Delhi-NCR, Bangalore, Chennai and Mumbai, together account for about 74% of the leads and 72% of the seat enquiries, respectively.
“The flexibility to expand or contract on-demand, shorter lease tenures, fully serviced, amenity-rich offices and being able to create workspaces of the future which act as magnets for returning employees and in the war for talent are key factors fueling the flex market growth,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
According to him, an increasing number of enterprises are expanding their usage of flex space in tandem with transformational changes with respect to remote work, mobility, and flexibility. He expects the flex footprint to grow to nearly 75 million sq ft by 2025 from the current 40 million sq ft levels, riding the wave of enterprise demand for managed workspaces.
“Flex industry has grown drastically in popularity and adoption among Indian corporates of all sizes & scale, over the last few years. All forms of Flex – coworking, private managed office and hybrid on demand usage, are robust demand…Coworking stands experiencing out as the best fit and solution for sub 100 seats requirement which is 90% of the market. Enterprises have been re-evaluating the office strategy and return to work equations,” said Paras Arora, Founder & CEO of Qdesq. Bangalore is the leading tech hub and along with Delhi-NCR forms the two major start-up clusters in the country and thus sees a significant demand also coming from big tech firms and well-funded unicorns. Start-ups, small and medium enterprises (SMEs) and companies in the and e-commerce segments fintech focus on emerging economic centers and smaller towns for business growth and enterprises looking to tap into the talent pool of an mobile workforce are the mains of This rise in enquiries for flex seats in tier II cities showed the report.
Chandigarh, Indore and Lucknow are also seeing robust traction for flexible office space enquiries, while there is good traction across major tier II cities in the north, west and south India. More than half of the total flex seats leased in 2021- 22 were in the form of significant-sized transactions of 300 or more seats. In absolute terms, Bengaluru saw around 25,000 flex seats leased, followed by Pune with around 15,000 over the same 12-month period.
As per the JLL-Qdesq report, aggregate enquiries are driven by micro, small and medium enterprises and other categories across non-tech industries followed by tech and start-ups. These three segments together account for 59% of the flex space enquiries. Enterprises across a wide spectrum but led by tech and start-ups are now driving conversations around demand for flex and even actual space take-up, showed JLL’s data on actual flex seat transactions. Tech and start-ups together contribute 48% of the actual flex space take-up.