India among the cheapest flexible office locations in world: Report

Indian metro cities are among the cheapest to operate flexible office, with New York being the world’s most expensive flexible office location, according to a joint report by flexible office specialist, Workthere and international property consultant Savills.

New York, San Francisco, Singapore, London and Berlin are among the world’s most expensive office locations, with per seats rental ranging from Rs 60,000 to Rs 72,000. In India, Mumbai ranks as the most expensive flexible office location with Rs 20,420 rental followed by NCR with average rental of Rs 14,759.

“India has been witnessing new trends in the flexible workspaces segment. Co-working operators are constantly evolving and relooking at their strategies to gain better investment. As many companies seek a return to the office, employees prefer a hybrid work setup that creates more flexibility,” said Naveen Nandwani, MD, Commercial Advisory & Transactions, Savills India and head of Workthere India.

Workthere is a brokerage-backed online listing platform, for flexible, co-working nd managed office spaces, across geographies.

India has one of the largest office markets in Asia Pacific region. The major demand drivers for office spaces have been the IT/ITeS, BFSI and consulting occupiers. The top operators in India are Awfis, WeWork, CoWrks, Smartworks and Tablespace with over 125,000 total seats. While technology occupiers continue to drive demand; flexible workspaces have gained share and took 13% of the overall office demand of 639.9 mn sq. ft. in 2021.

The emergence of India as a start-up powerhouse is also an important contributor to the demand for flexible spaces. They have managed to reinvent their offerings and reposition themselves better suited to today’s dynamic world. Time and distance are important factors indicated by most employees and hence there’s a high demand concentration in the suburban and peripheral areas of cities. Flexibility is clearly seen as a benefit for space management.

“The flexible market is now dominated by high quality spaces because occupiers are focussed on cultivating an updated office strategy around a space employee want to be in, and in an environment that enhances their desired culture,” said Griffin Foley, Northeast Lead, Workthere Americas.

Foley added that businesses were seeking to locate in places near subway stations to make the commute more convenient and limit travel times.

One of the most mature flexible markets globally, London was now experiencing a strong recovery.

“Due to the large number of flex spaces there is a variety of pricing models and quality, meaning the rate of that perceived recovery, when only pricing is taken into account, is slightly below expectations as some operators are willing to drop prices to increase occupancy levels,” said Jack Williamson, head of Workthere UK,

Meanwhile, Berlin’s flexible market has limited supply with a vacancy rate of 3.5%. The growth of the flexible market is being driven by science, digital and technology sectors, keeping it buoyant during the Covid-19 pandemic, where the flex market only saw a 1.4% decrease in space during the two years of the pandemic.

This growth is set to continue, said Workthere, as Tesla prepares to begin production of electric vehicles from its first European manufacturing plant, located near the city; there is also a plentiful supply of venture capital funding for innovation start-ups.

Lisbon, which is among the cheapest flex markets in the rankings – at just $329 per desk per month – was booming since conventional office space is now hard to secure. Lisbon is experiencing an overall office vacancy rate of 7%, and is now one of the most competitive European flexible markets.

Source: GWFM Research

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