The demand for flexible office spaces has increased post the pandemic, with major companies and businesses including start-ups now opting for coworking, said realty experts. Leading property consultant ANAROCK said out of a net absorption of approximately 20.8 Mn (million) sq ft across the top seven cities in H1 (first half of the year) 2022, the share of coworking spaces stood at 20 per cent. Back in H1 2021, its share was just 6 per cent of net office absorption of approximately 9.33 Mn sq ft. The seven cities are the Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Kolkata, Chennai and the National Capital Region (NCR). On the contrary, the share of IT/ITeS (Information Technology/ Information Technology enabled Services) sector – India’s leading office demand driver – declined from 49 per cent in H1 2021 to 36 per cent in H2 2022. However, this decline is largely because many IT companies are now also preferring flexible spaces to regular office spaces, as per ANAROCK. In terms of net absorption across the top seven cities in H1 2022, Bengaluru and Hyderabad remained on top, comprising 50 per cent of total demand share. Western markets of Mumbai Metropolitan Region (MMR) and Pune saw net absorption of nearly 5.45 Mn sq ft. Of this, 27 per cent was by coworking players. Bengaluru, Hyderabad and Chennai – the top southern cities –together witnessed net office absorption of approximately 12.2 Mn sq ft, of this 18 per cent was by coworking players. In the NCR, net office absorption stood at approximately 2.75 Mn sq ft. Of this, 15 per cent was by coworking players. In Kolkata, merely 0.4 Mn sq ft office space was absorbed. Of this, 14 per cent was by coworking players. ANAROCK Group chairman Anuj Puri said: “Coworking has received a major boost after Covid-19 disrupted the previous status quo. A major factor driving the demand is that these spaces are not concentrated in just the city centres or major employment hubs; they’re spread across different areas, including the housing-intense suburbs. Coworking spaces are now also operating out of malls and hotels across cities. Many large office parks are also housing coworking spaces. This helps companies to remain closer to their employees and offer them flexibility.” The property consultant said another advantage of flexible office spaces is that companies can plug-and-play at the same cost rather than wrestling with office layouts and fit-outs. The lock-in period for taking up a regular office space is anywhere between three-four years. All these factors have also helped boost the demand for coworking spaces. Besides, average monthly office rentals are also seen to be rising across the top cities. The NCR and Hyderabad each saw a 5 per cent rise in average monthly office rentals in H1 2022 compared to the same period in 2021. Currently, the average monthly office rent in the NCR is Rs 80 per sq ft, while in Hyderabad it is Rs 60 per sq ft. Bengaluru and Pune each saw a 4 per cent yearly rise. The MMR, Chennai and Kolkata witnessed a 2 per cent rise each in average monthly rentals in the same period. Interestingly, in the MMR, average office rentals are the highest among the top seven cities at Rs 128 per sq ft. The average rate in Chennai is Rs 61 per sq ft, while Kolkata has the lowest rate at Rs 53 per sq ft.
