CBRE Asia Pacific Flexible Office Market Report Confirms Bangalore Is the Leader in APAC for Grade-A Flexible Inventory

CBRE has published the results of its H2 2022 Asia Pacific Flexible Office Market study. Bangalore topped the list of Asia-Pacific region (APAC) cities with the most flexible stock, surpassing eleven major cities. Bangalore registered 10.6 million square feet of Grade-A flexible stock as of September 2022, the most among all major APAC cities, including Shanghai, Beijing, Seoul, Tokyo, and Singapore.

Delhi-NCR and Hyderabad, two more Indian cities, also contributed for the biggest amount of flexible stock in the APAC region. Delhi-NCR reported 6.6 million square feet of Grade-A flexible stock as of September 2022, followed by Hyderabad with 5.7 million square feet. In addition, in the Grade-A class, India and Singapore recorded the greatest penetration of flexible office space compared to other Asian countries. The rate of penetration in Hyderabad was the highest at 5.5%, followed by Bangalore at 5.4%, Singapore at 4.6%, and Delhi-NCR at 4.5%.

The survey also found that, post-pandemic, India continues to have the strongest growth in the APAC flexi-office industry.

During the period of January to September 2022, the total flexible stock volume in the APAC area reached 76 million square feet, representing a 6% year-over-year increase and a 15% increase over the pre-pandemic growth level. During this time span, there were 3000 flexible space hubs across APAC. Tech organisations (36%) and business services firms (28%) continue to be the leading consumers of flexible office space in APAC, followed by banking, life sciences, and retail sectors.

CBRE's chairman and chief executive officer for India, South-East Asia, the Middle East and Africa, Anshuman Magazine, said, "India leads the APAC area in flexible A-grade office stock. To support hybrid working arrangements, occupants are reengineering their portfolios and workplace practises to a significant degree. This indicates a solid office sector expansion in the context of a rapid return to office phenomenon in India, spearheaded by flexible space operators. Bangalore, Delhi-NCR, and Hyderabad account for around 35% of the total flex stock (A Grade) in the APAC area, with Bangalore having the greatest flexible stock among Asian cities."

Henry Chin, global director of investor thought leadership and head of research for CBRE APAC, said that the flex market has evolved in the previous two years.

"As we enter the new year, businesses that continue to utilise flex spaces will be in a better position to accept hybrid working arrangements, assist their workers, and maintain their real estate agility. Moreover, operators have recognised and are growing into secondary markets as a result of their ability to compare and choose from a number of flex choices."

The CBRE APAC analysis evaluated 19 significant Asia-Pacific markets, including Japan, China, South Korea, the Philippines, Hong Kong, Singapore, Australia, and India.

The paper identifies three significant themes that will shape the flexible office environment in 2023.

These consist of:

*Flexible space providers who offer on-demand memberships to accommodate increasingly scattered workforces as a consequence of the growing use of hybrid work

Increasing occupier demand for bespoke enterprise and turnkey solutions to alleviate escalating fit-out costs and Capital expenditure limitations.

As flexible space providers develop agreements with landlords through management contracts, asset-light solutions are used.