Bengaluru and Hyderabad continued to lead the top seven cities in terms of net absorption in the first half of 2022, accounting for 50% of the overall demand share.
According to real estate experts, the need for flexible office spaces has grown since the epidemic, with big corporations and businesses, including start-ups, now choosing coworking spaces.
Leading real estate consultant ANAROCK reported that coworking spaces accounted for 20% of the net absorption of 20.8 Mn (million) sq ft across the top seven cities in H1 (the first half of the year) 2022. Its contribution of the 9.33 million square feet of net office absorption in H1 2021 was only 6%. Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Kolkata, Chennai, and the National Capital Region are the seven cities (NCR).
The major office demand generator in India, however, the IT/ITeS (Information Technology/ Information Technology enabled Services) sector, saw a fall from 49% in H1 2021 to 36% in H2 2022. The main reason for this reduction, according to ANAROCK, is that many IT companies increasingly favor flexible workspaces over traditional office facilities.
Bengaluru and Hyderabad continued to lead the top seven cities in terms of net absorption in H1 2022, accounting for 50% of the overall demand share. Net absorption in the western markets of Pune and the Mumbai Metropolitan Region (MMR) was close to 5.45 million square feet. Of this, coworking participants made up 27%.
The top southern cities of Bengaluru, Hyderabad, and Chennai had a combined net office absorption of over 12.2 million square feet, with coworking companies accounting for 18% of this. Net office absorption in the NCR was around 2.75 million square feet. 15% of this was contributed by coworking participants. Only 0.4 million square feet of office space were occupied in Kolkata. Of this, coworking participants made up 14%.
Coworking has gained a big boost because Covid-19 shattered the old status quo,” said Anuj Puri, chairman of ANAROCK Group. The fact that these spaces are dispersed over multiple places, including the suburbs with a high concentration of housing, rather than being concentrated in only the city centers or key employment hubs, is a significant element influencing the demand. In many locations, coworking spaces are now also located in hotels and shopping centers. Coworking spaces can be found in a lot of big office parks. This enables businesses to maintain a tight relationship with their staff and provide them flexibility.
According to the property consultant, another benefit of flexible office spaces is that businesses don’t have to struggle with office layouts and fit-outs and can simply plug and play for the same price.
Three to four years are the lock-in period for leasing a conventional office space. The demand for coworking spaces has increased as a result of all these causes.
