The year 2022 marked an unprecedented milestone in the commercial real property, with an unprecedented office absorption rate of 50.8 million square. ft. according to reports from industry experts. This figure is not only higher than those of the previous five years (2015-2019) by 3.1% while also standing in the second position for absorption rates in the last decade with the highest rate being just behind 2019 figures. This rise in office occupancy, driven by the return to work in a wide range of industries does more than boost net absorption, but it also paints the picture of stability in the market and a positive outlook for the future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
In response of evolving business demands and strategies for portfolios, there's been a growing need for flexible, agile, and contemporary workplaces. This trend towards flexibility in commercial operations has driven flexible workspaces to the forefront as a preferred choice among tenants. The past year has seen the massive shift of enterprises in favour of flexible workspaces. This was driven by the need for diversification of portfolios as well as catering to the requirements of employees' modern needs.
Harsh Binani, Co-Founder of Smartworks the largest Indian enterprise-focused workspace platform, expressed immense optimism regarding Commercial real estate market's path. He emphasized the explosive growth of flex spaces within the commercial property landscape, stressing their rapid expansion. Binani predicted a steady phase of growth, predicting significant growth and consolidation with large operators in the industry of flex over the five years to come.
Benefits Fueling the Flex Market Harsh Binani Growth
The widespread adoption of flex space across sectors is a testament to their myriad benefits. Key factors that drive the growth in flex space are real property cost optimization flexibility, scalability and flexible lease tenures and talent strategies, extensive managed services, as well as appealing amenities-rich modern workplaces. Binani confirmed this assertion by declaring "Flex is the new way of working," as well as citing good leasing trends among unicorns and enterprises, which are currently around 80% in their total portfolio.
Growth Trajectory and Market Predictions
The flex space industry, rising out of recessionary market conditions, is currently experiencing an increase in growth. Industry experts predict an increase in this upward trajectory, projecting a double-digit increase in 2023. The hybrid office culture is expected to be the most preferred option for occupiers until 2023, increasing the market share of flex spaces. The predictions suggest that flex spaces are expected to have a market share of will grow to 4.2% by 2023. The entire industry plans to double the size of the space in the future two or three years.
The Future Outlook
In the face of Harsh Binani growing demand for flexible and well-equipped work spaces, the flex space segment is in the midst of significant growth. The paradigm shift in workspaces and portfolio strategies will continue to drive the surge in need for flexible, fluid, and modern workspaces across all industries and business.