Coworking firms take on lease 31 lakh sq ft office space in January-March, up 7% annually: CBRE

Leasing of office space by co-working centre operators grew 7 per cent to 31 lakh square feet during the January-March period across nine major cities amid rising demand for flexible workspaces from corporates, according to CBRE.

Co-working firms had taken on lease 29 lakh square feet of office spaces from property owners in the year-ago period. In its latest report on the Indian office market, real estate consultant CBRE noted that flexible operators became second largest contributor to the total gross demand for office spaces during the quarter ended March 2024.

Flex space operators took on lease 22 per cent of the total gross office leasing of 144 lakh square feet during the January-March period this year. Flexible space operators take on lease office spaces from real estate developers and then sub-lease the areas mainly to domestic and global corporates.

Delhi-NCR, Chennai, and Bengaluru were the most preferred cities for the flex operators. Technology companies directly taking space from builders were the biggest demand generator with a share of 26 per cent.

CBRE noted that flexible space operators have emerged as a prominent force within the Indian office leasing ecosystem consistently securing a share exceeding 15 per cent in the past five years.

"As hybrid work models become increasingly popular, the anticipated strong demand for flexible spaces would propel the sector's impressive growth trajectory for the foreseeable future, " the consultant said.

As per the report, the gross absorption of office spaces stood at 144 lakh (14.4 million) square feet during January-March across the 9 cities, a marginal decline of 3 per cent annually.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, "The office sector continued witnessing meaningful gains in 2023, enhanced by a resurgence in occupiers' sentiments and pent-up demand post a rise in return-to-offices.

"During 2024, occupiers would prioritise high-quality office space as they continue to facilitate portfolio expansion and consolidation. India's inherent advantages, such as its skilled workforce and well-established business ecosystem, continue to hold appeal, leading to a positive outlook for the office sector," Magazine added.