Leasing for flexible offices records best quarter in April-June: Report

Mumbai leads trend; India's office market to see 'sustained growth': Colliers

Flexible (flex) office spaces in India had their highest-ever quarterly leasing in April-June, according to data released by a real estate consultancy on Wednesday. In the second quarter of the calendar year 2024, a record 2.6 million square feet (msf) of flex office space was leased.

"Flex space activity across the major cities continues to grow from strength to strength," said Vimal Nadar, senior director and head of research, Colliers India.

This comes at a time when WeWork Global has decided to sell off its complete stake in the India unit and exit the country.
Business Standard reported earlier this week that flex operators were optimistic about the future.

 

"Flex operators have already leased about 4.4 million square feet of office space in H1 2024, underscoring the occupiers’ continued preference for flex spaces. This also reflects the evolving needs for agility and adaptability in the modern business environment," said Nadar, referring to the first half of the year.

Overall demand for office space in the country rose by 8 per cent in the April-June quarter, led by Mumbai. In that city, office leasing jumped 119 per cent to 3.5 msf compared to 1.6 msf in the same quarter last year.

"This is mainly attributable to strong demand from newly completed office supply during the quarter," Colliers said. Mumbai was followed by a 73 per cent jump in Hyderabad to 2.6 msf from 1.5 msf, and 41 per cent in Bengaluru to 4.8 msf.

In the first half of the calendar year 2024, office leasing nationwide rose 19 per cent to 29.4 msf in 24.8 msf.

"The demand for quality office spaces continues to surge, reflecting the confidence of occupiers and investors alike," said Arpit Mehrotra, managing director, office services, India, Colliers.

"Anticipated easing of global financial headwinds and continued resilience in domestic economy augurs well for sustained growth in India’s office market."

According to Colliers, a strong performance in the first half has set the tone for office space demand to "comfortably" surpass 50 million square feet for the third consecutive time in 2024. In 2023, the office sector saw a record leasing of 58.2 msf.