Bengaluru tops list of APAC cities with flexible office stock, Delhi third

Bengaluru continued to top the list of cities with the highest available stock of flexible office space in the Asia-Pacific (APAC) region, a report released on Thursday showed. Delhi NCR overtook Beijing and Seoul to emerge in third spot on the list.

According to real estate consultancy CBRE's "H1 2023 Asia Pacific Flexible Office Market" report, Bengaluru has 12.9 million square feet of flexible office space as of March 31. It is followed by Shanghai and Delhi NCR with a stock of 10 mn sq ft and 8.4 mn sq ft.

New flex space supply in Delhi NCR and Bangalore accelerated from 2022, with the two cities witnessing the addition of a combined 3.1 mn sq ft of stock in the first three months of 2023.

The other Indian cities that made it to the top 10 cities were Hyderabad and Mumbai, with 6.0 and 4.7 mn. sq. ft. of flexible office stock.

According to the report, ongoing economic uncertainty is strengthening the importance of portfolio flexibility and prompting a greater focus on cost management, driving occupier demand for flex space.

Half of the respondents believe that their portfolios are under-allocated to flexible office space and intend to increase their use of it.

"In an environment of ongoing economic uncertainty, businesses are recognizing the value of portfolio flexibility and cost management. This has resulted in a heightened demand for flexible office solutions as occupiers seek agility and cost-effective options," said Anshuman Magazine, chairman and chief executive officer (CEO) for India, South Africa, Middle East and Africa at CBRE.

"This reflects the growing demand for agile and adaptable workspace solutions in the region. The flexibility and cost-efficiency provided by flexible office spaces have become even more vital for businesses navigating through the dynamic and uncertain business landscape," said Henry Chin, global head of investor thought leadership and head of research at CBRE APAC.

The technology firms accounted for the largest portion of leasing activity, with a 35 per cent share, followed by business services at 16 per cent, finance firms at 12 per cent, retail firms at 8 per cent, and life sciences at 7 per cent.

The report also pointed out additional trends, including a preference for dedicated spaces such as enterprise solutions (69 per cent market share) due to concerns about capital expenditure. Furthermore, there is significant demand for event spaces (45 per cent share) and access passes (43 per cent share).