Co-working operators to lease 7-9 mn sq ft space by 2020 from over 5 mn sq ft this yr: CBRE

With rising demand for shared office space, co-working operators are expected to lease about 7-9 million sq ft by 2020 from over 5 million sq ft estimated this year, according to property consultant CBRE.

"Originating as a shared service for start-ups, flexible spaces are now being utilized by established corporates as well to make their portfolios more agile amid a dynamic business environment.

"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," Anshuman Magazine, Chairman, India and South-East Asia, CBRE, said in a report.

He said the leasing quantum of this segment is expected to rise from about 5.4 million sq ft in 2018 to 7-9 million sq ft by 2020.

The CBRE report further highlighted that the overall stock of flexible space market in India (including seven Indian cities) increased by about 50 per cent, from almost 10 million sq ft in 2017 to about 15 million sq ft by Q3 2018.

More than 80 per cent of the leasing by flexible space operators was witnessed in the top three cities of Delhi-NCR, Bengaluru and Mumbai.

Moreover, the share of flexible spaces as a part of total office absorption has also doubled from 5 per cent in H1 2017 to about 10 per cent in H1 2018.

Going forward, CBRE expects that flexible spaces would not be limited to office buildings. Operators are now looking at under-performing shopping centres as well as mixed-use (office-cum-retail) developments.

It anticipated that operators would also look at semi-investment grade or refurbished options, keeping in mind the location and cost of these properties.

"As employees are keen on the percolation of flexibility to all aspects of work, it is evident that flexible spaces are here to stay. The optimism of flexible space operators is being fueled by the rising interest of established corporates in this segment.

"We anticipate that this trend would continue, given the willingness of operators to customise offerings and prioritise member loyalties," said Ram Chandnani, Managing Director, Advisory and Transaction Services India, CBRE.