In­dia leads in flex­i­ble mar­ket space mar­kets

HT Estates - - FRONT PAGE - HT Cor­re­spon­dent let­[email protected]­dus­tan­

NEWDELHI: CBRE South Asia Pvt. Ltd, a real es­tate con­sult­ing firm, re­cently an­nounced the find­ings of its lat­est re­port ti­tled ‘Flex­i­ble Space’ Ten­ant Sur­vey – 2018. Ac­cord­ing to the re­port, the over­all stock of flex­i­ble space mar­ket in In­dia (in­clud­ing all seven In­dian cities) in­creased by about 50%, from al­most 10 mil­lion sq. ft. in 2017 to about 15 mil­lion sq. ft. by Q3 2018, mak­ing it amongth­e­biggest mar­kets in the APAC re­gion. Fur­ther­more, Ban­ga­lore and Delhi-NCR were the largest mar­kets for flex­i­ble spa­ces in In­dia, with a com­bined share of al­most 55% in over­all leas­ing by flex­i­ble space op­er­a­tors. The re­port also high­lights that flex­i­ble spa­ces ac­count to ap­prox­i­mately 1.7% of to­tal stock in Asia-Pa­cific; Shang­hai and Delhi-NCRaretheon­lyt­woc­i­ties where flex­i­ble space share is morethan3% of the over­all of­fice stock.

Leas­ing ac­tiv­ity by flex­i­ble space op­er­a­tors quadru­pled from 2016 lev­els to about 3.5 mil­lion sq. ft. in 2017.

More than 80% of the leas­ing by flex­i­ble space op­er­a­tors was wit­nessed in the top three cities of Delhi-NCR, Ban­ga­lore and Mum­bai. More­over, the share of flex­i­ble spa­ces as a part of to­tal of­fice ab­sorp­tion has also dou­bled from 5% in H1 2017 to about 10% in H1 2018.

Com­ment­ing on the find­ings of the re­port, An­shu­man Mag­a­zine, chair­man, In­dia and South­East Asia, CBRE, said: “Orig­i­nat­ing as a shared ser­vice for start-ups, flex­i­ble spa­ces are now be­ing uti­lized by es­tab­lished cor­po­rates as well to make their port­fo­lios more ag­ile amid a dy­namic busi­ness en­vi­ron­ment. Given that the In­dian flexi- ble space mar­ketis oneof the big­gest across APAC, we an­tic­i­pate that this seg­ment will re­main high on the in­vestor radar as well. We ex­pect that the leas­ing quan­tum of this seg­ment would rise from about 5.4 mil­lion sq. ft. in 2018 to about 7-9 mil­lion sq. ft. by 2020.”

In Au­gust 2018, CBRE In­dia’s Re­search and A&T Oc­cu­pier Group con­ducted in­ter­views with lead­ing flex­i­ble space ten­ants across the coun­try to get their views on the over­all ex­pe­ri­ence of op­er­at­ing from flex­i­ble spa­ces. The sur­vey cov­ered both global and do­mes­tic ten­ants op­er­at­ing out of var­i­ous flex­i­ble space for­mats such as co-work­ing, busi­ness cen­ters and hy­brid spa­ces. The cov­er­age of this sur­vey was wide enough, in­clud­ing ten­ants whose share of flex­i­ble spa­ces in their over­all port­fo­lio ranged­from­less than5% to more than 50%.

There­spon­dents be­longed to a wide spec­trum of in­dus­tries; rang­ing from tech­nol­ogy, bank­ing, fi­nan­cial ser­vices, en­gi­neer­ing, man­u­fac­tur­ing to me­di­aand e-com­merce.

The sur­vey also in­di­cated that re­spon­dents had var­ied re­sponses to­wardswork­ingfrom flex­i­ble spa­ces, de­pend­ing on the sec­tors they be­longed to. For in­stance, BFSI cor­po­rates, un­der­heavyreg­u­la­tions for data pri­vacy/se­cu­rity, are cur­rently in the early stages of in­cor­po­rat­ing agility in their of­fice port­fo­lios.

The sur­vey also found ‘Core + Flexi’ space so­lu­tions are con­ducive for space ef­fi­ciency, which is the key to cost man­age­ment across the globe. A huge ad­van­tage for flex­i­ble spa­ces was low / neg­li­gi­ble up­front costs in com­par­i­son with a tra­di­tional lease, a state­ment af­firmed by 70% of our re­spon­dents.

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