The Flex-Seats Phenomenon is Expanding in India and is Poised to Grow Further

Flex-Seats in India going strong

Pune:

In FY23, the demand for coworking spaces surpassed all previous records, with India's IT hubs leading the pack. Latest real estate data shows that leasing of "flex-seats" has increased by 20%, with the biggest activity occurring in Bengaluru, Hyderabad, and Pune.

An industry analysis found that in FY23, company leases of co-working spaces increased to 103,665 seats from the previous year's 87,345 seats, mostly owing to corporations' increasing desire for flexible space amid weakening economic circumstances. In FY23, leasing of flexible seats hit an all-time high, increasing by 20% from the previous year and by a factor of two from FY21.

The analysis found that in FY23, the 'flex seat' rentals were dominated by the IT hubs of Bengaluru, Hyderabad, and Pune. Companies like Smartworks, WeWork, Awfis, Skootr, Urban-Vault, Vatika Business Centre, and The Executive Centre are growing rapidly to keep up with the demand. 

The post-pandemic shift in tenant demand and modifications to workplace dynamics have facilitated the expansion of the flex space market. There was a dramatic rise from 9% in FY20 to 14% in FY23 in the proportion of leased space that was provided by flexible workspace providers. The demand for flex-sector operator space also increased dramatically in FY23, by 57% compared to FY20 and 76% compared to FY22.

With a CAGR of 41% over the previous five years, the flexible workspace market has expanded by a factor of five.

Because flex spaces have become the norm, the data provide a clear indication of the market's trajectory. The changing tastes of both tenants and workers have resulted in a dramatic increase in demand for flexible workspaces. Recently, Smartworks added additional centres and leased 530,000 square feet of office space in Noida and Gurgaon, India. Because of this expansion, their area property holdings now total more than 1 million square feet.

Since companies may rent just the space they need for a given time period in flexible office spaces, they save money by not having to pay a large deposit or commit to a lengthy lease term.