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Harsh Binani on Flex Spaces in 2023

Harsh-Binani Harsh Binani, Co-Founder, Smartworks, India's largest enterprise-focused workspace platform

New Delhi, January 21: 2022 has been a landmark year for commercial real estate with a record office absorption, standing at 50.8 million sq. ft. as per industry reports, surpassing the five-year (2015-2019) pre-pandemic average by 3.1 per cent as well, and it is second only to the 2019 net absorption figures for the past 10 years. Return to work has gained momentum across industries pushing office occupancies higher and supporting the net absorption numbers, projects market stability, and a promising future. 

The evolving business requirements and portfolio strategies fostered the need for flexible, agile, and modern workspaces. This new dawn of flexibility in businesses paved flex spaces as a mainstream preference among occupiers. The need to diversify portfolios and adapt to employees' new normal needs fueled significant move of enterprises to Flex workspaces in the past 12 months. Optimistic about the segment's growth, Harsh Binani, Co-Founder, Smartworks, India's largest enterprise-focused workspace platform, said, "The commercial real estate sector is extremely bullish and promising. It has performed remarkably well over the past ten years. Flex space, which makes up a small portion of all commercial space, is expanding as a sector at a substantially quicker rate. Large operators will continue to consolidate and expand their footprints as the supply side of the flex industry enters a promising growth phase. In the next five years, the sector should experience significant and escalating growth.

This augmented acceptance of flex spaces across sectors is a testament to the myriad benefits of flex spaces. Real estate cost optimization, flexibility to scale up and down, flexible lease tenures, talent strategies, fully managed services, and amenity-rich modern workspaces are observed as the key drivers fueling the flex market growth. "Flex is the new way of working. We are seeing strong leasing by unicorns and enterprises that form around 80% of our portfolio and expect this to continue in the coming quarters. In the last twelve months alone, we accounted for more than 10% of India's commercial office space leasing. We believe in doubling our footprint over the next twelve to 18 months. We plan to add another 2.5-3 Mn sq. ft in the coming year and take our footprint to 10 Mn sq. ft from over 7 Mn sq. ft," added Binani.

Risen like a phoenix from the remnants of uncertain market volatility, the flex space market is soaring in full swing with positive and upward growth. Industry experts foresee further consolidation in the market and anticipate double-digit growth in 2023. Industry forecasters predict, throughout 2023, hybrid office culture will continue to be a preferred choice for occupiers, and flex will have a more significant market share. The market penetration of flex spaces is expected to rise to 4.2% by 2023. "The entire industry is also expected to double the footprint in the next two to three years, and we are not far from clocking 1 million seats very soon.. The future of flex spaces is extremely optimistic and bullish for a robust growth curve," said Harsh Binani

With the growing demand for flexible and well-equipped work environments across industries and businesses, flex space segment is only expected to surge substantially. The demand for flex space will continue to surge as workplace transformation and portfolio strategies will necessitate more flexible, agile, and modern workspace.

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