The country is expected to witness deeper penetration of flex spaces in the coming years, but the growth will be slow and organic. Flex spaces are expected to reach 50 million square feet in next 3 years by growing at an average of around 15-20 percent annually, a report by real estate firm JLL India says.
However, the trajectory won't be linear. "While the flex-space market more than tripled in the last 3 years, the momentum going ahead will be relatively slower. Players are likely to tread cautiously, and the overall market is expected to expand 1.5 times from the current size," says Dr Samantak Das, Chief Economist and Head of Research & REIS, JLL India.
Large cities and enterprises are expected to to drive the growth. But operators in co-working space also say clients are interested in taking dedicated and secure private offices. Manas Mehrotra, Founder of Benagluru-based 315Work Avenue which manages around 12,000 seats (6,00,000 sq ft )office space in the city says it plans to expand to 1 million sq ft by next year.
"As companies look to resume business, redesigning and restructuring of existing real estate will pose yet another challenge," he says. There will be a lot of focus on social distancing measures and communication protocols to ensure a safe working environment, he adds. The other big change is companies are ready to look at flexibility, neighbourhood spaces and team collaboration in a post-COVID world.
Srivatsan Padmanabhan, Co-founder and COO, GoFloaters says, "Teams of more than 10 employees to large corporates with multi location teams are looking at affordable on-demand to short-term satellite or distributed offices and meeting spaces that are available at their team's disposal on day or monthly basis."
Since there are over 300 flexspace operators, the sector is likely to witness consolidation, predicts JLL. Even as operators lay greater emphasis on profitability and strategies to ensure stable occupancy levels, greater focus on providing customised office space solutions is expected.