Explosive Development in Business Real-estate in 2022: A Shift to Flex Areas
Wiki Article
The year 2022 marked an unprecedented moment in the commercial real estate. It saw an extraordinary office absorption rate reaching a staggering 50.8 million square. feet. according to reports from industry experts. This figure does not only beat the pre-pandemic average of the 5 years that preceded it (2015-2019) by 3.1% However, it also stands as the 2nd highest rate of absorption in the past decade which is just behind the 2019 numbers. This soaring increase in office occupancy, brought on by the return of work across various sectors, does more than boost the net absorption rate but it also paints an optimistic picture of stability in the market with a promising future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
In response to evolving business needs and portfolio strategies, there's been a growing demand for adaptable, agile, and modern workspaces. This shift towards flexibility in the business environment has propelled areas that are flexible into the spotlight as a preferred choice among the occupiers. The past year has seen a substantial migration of enterprises in favour of flexible workspaces. This was driven by the need in diversifying portfolios while catering to the evolving needs that employees' needs have changed.
Harsh Binani, Co-Founder of Smartworks the largest Indian enterprise-focused workspace provider, expressed overwhelming optimism about business real estate sector's trend. He highlighted the explosive growth of flexible spaces within the commercial market, and Harsh Binani emphasized their rapid expansion. Binani said he was anticipating a robust phase of growth and anticipates significant growth and consolidation between large operators in the flex space over the next five years.
Benefits Fueling the Flex Market Growth
The broad acceptance of flex spaces across different sectors demonstrates the numerous benefits they offer. Some of the main factors driving the growth of flex spaces include estate cost optimization flexibility, scalability and flexible lease tenures, employee Harsh Binani strategies, complete managed services, and the attraction of modern amenity-rich workspaces. Binani further reinforced this notion by affirming "Flex is the new way of working," with reference to the strong trend of leasing among firms and unicorns, which today comprise about 80% the portfolio of these companies.
Growth Trajectory and Market Predictions
The market for flexible space, emerging from markets that were shaky is experiencing a rapid increase in growth. The experts in the industry predict an ongoing uptrend, with a forecast of a double-digit increase in 2023. The hybrid office model is likely to continue to be an option for those seeking to work in 2023, which will increase the market share of flex spaces. As per predictions, flex spaces' market penetration will rise to 4.2% by 2023. This is in line with industry expectations of expanding the footprint in the next two or three years.
The Future Outlook
Amidst escalating demand for adaptable and well-equipped work environments, the flex space segment is anticipated to witness significant growth. The transformational shift in workspaces and portfolio strategies will continue to drive the surge in demands for flexible, dynamic, and modern workspaces across different industries and firms.