Bengaluru tops in Grade-A flexible among 12 APAC cities: CBRE report

Delhi-NCR, Hyderabad are two other Indiam cities in the top-12 list

Bengaluru has the highest flexible stock of Grade-A assets among 12 major Asia-Pacific (APAC) cities, according to CBRE’s H2 2022 report on the flexible office market in the region. As of September 2022, Bengaluru had 10.6 million sq ft of Grade-A flexible stock, ahead of Shanghai, Beijing, Seoul, Tokyo, and Singapore, the study reveals.

Shanghai and Beijing ranked second and third in the top 12 APAC cities with the highest flex stock.

Other than Bengaluru, two other Indian cities, Delhi-NCR (6.6 million sq ft) and Hyderabad (5.7 million sq ft), also had high levels of flexible stock in the APAC region, the report said.

Moreover, in the Grade-A segment, India and Singapore reported higher penetration of flexible office space than other Asian nations. Hyderabad recorded the highest penetration at 5.5 per cent, followed by Bangalore (5.4 per cent), Singapore city (4.6 per cent), and Delhi-NCR (4.4 per cent).

The report also noted that post-pandemic, India continues to show the highest growth in flexi–office market in the APAC region. The study says total flexible stock in the APAC region stood at 76 million sq ft, up six per cent year on year, 15 per cent above the pre-pandemic growth level during the January-September 2022 period.

During the first nine months of this calendar year, the total number of flexible space centres in APAC stood at about 3,000.

India has the highest flexible Grade-A office stock in the APAC region. Occupiers are largely re-engineering their portfolio and workplace strategies to accommodate hybrid working arrangements. This signals healthy office sector growth amid an accelerated return to office phenomena in India, led by flexible space operators, said Anshuman Magazine, chairman & CEO-India, South-East Asia, Middle East & Africa, CBRE.

It is also noteworthy that Bengaluru, Delhi-NCR, and Hyderabad account for nearly 35 per cent of the total flex stock (A Grade) in the APAC region, with Bengaluru topping the list of Asian cities, he added.

The report's findings show that tech firms, with a 36 per cent share, and business services (28 per cent) remain the top users of flexible office space, followed by finance, life science firms and retail firms in the overall APAC flex market.

“The flex industry has matured over the past two years,” said Henry Chin, Global Head of Investor Thought Leadership and Head of Research, CBRE APAC. “As we approach the new year, companies that continue to adopt flex would be better positioned to embrace hybrid working arrangements, support their employees, and remain agile in their real estate strategies,” he added.

Additionally, with companies being able to compare and opt for a variety of flex options, operators have identified and are expanding into secondary markets, Chin said.

The CBRE study covered 19 major Asia-Pacific markets, including Japan, China, South Korea, Philippines, Hong Kong, Australia, Singapore and India.