Sunday, October 1, 2023
Tech Industry leads the way: Tech companies occupy 50% of total flex space in India
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  • India's flex space penetration stands at 6.5% as of Q1 2023
  • Flex space accounts for 10-12% of the occupiers' portfolio

BANGALORE, India, May 31, 2023 /PRNewswire/ -- The latest Colliers' report 'Global Occupier Outlook 2023', highlights key takeaways and insights on the evolving global workplace. The report reveals that APAC occupiers are grappling with the complexities of the hybrid work model, which remains inconsistent across markets and industries. The lack of clarity and macroeconomic uncertainty are posing challenges for businesses in projecting their space requirements. According to Colliers' experts, companies are facing the dilemma of striking a balance between providing employees with desired flexibility and realigning their portfolios for the next evolution of the workplace. Consequently, many businesses are deferring decisions on office take up and investment.

Despite these challenges across the globe, occupiers in India have been quick to adopt flex spaces, attracted by the flexibility, agility, and cost-effectiveness. Flex spaces are becoming an integral part of occupiers' portfolio, with its share in occupiers' total portfolio rising to an estimated 10-12% in 2023, from 5-8% before the pandemic in 2019, as per interactions with industry experts.

Colliers' leadership Sam Harvey-Jones, Chief Operating Officer, Asia Pacific and Mike Davis, Managing Director, Occupier Services, Asia Pacific in their recent visit to India note the positive market sentiments echoed by the Indian occupiers, particularly within the technology sector to adapt to the changing landscape with a focus on increasing flex space, using data to help in informed decision making and focus on the employee experience.

Harvey-Jones said, "The APAC region is undergoing a significant transformation in the way workspaces are perceived and utilized. While challenges persist, this period of change presents unprecedented opportunities to reimagine the role of space and explore new approaches that cater to evolving employee needs. The research finds APAC occupiers are shifting from an 'inward' business view of what's important in an office or location, to an 'external' view of what locations gives their employees access to in terms of culture, lifestyle and wellness."

Davis added, "Adopting technology solutions such as digital tools and dashboards is critical for addressing the challenges posed by the hybrid workforce. These tools enable occupiers to optimize space utilization, implement safety measures, and make data-driven decisions."

Colliers has developed tools that integrate various data sources to provide a comprehensive view and facilitate informed decision-making.

Key trends witnessed by Occupiers across the globe

The report features insights and resilient strategies being adopted by real estate decision makers to prepare for an uncertain future, adapt to emerging market trends and overcome unprecedented challenges. Focusing on three key aspects, Engage, Evolve and Accelerate, the findings uncover efforts being made by some of the leading global companies to strengthen processes, build resilience, and meet complex needs, with the aim to enrich the workplace experience.

Shining a spotlight on the ESG framework and the adoption of pioneering technology, the importance of a sustainable workplace is highlighted. Since over 65% of workers are seeking more in-person time with their teams, companies across the globe are investing in green design, tech-enabled features that promote higher health & safety, and wellbeing amenities, among others. Readers can also learn of other crucial factors occupiers are focused on including the right location, DEI initiatives, digital tools, and the precise portfolio mix. Further, as remote work gained momentum and proved to be effective, the big question of which work model augments productivity and business growth is addressed.

Across the APAC region, occupiers are keen on realigning their office portfolios to meet business needs while providing the flexibility employees' desire. The right portfolio is key to keeping culture intact, attracting and retaining best talent, and controlling operational costs. India has always been a large and growing market when it comes to commercial real estate. Despite the lingering threat of the pandemic, the scare of a recession and geopolitical tensions, the investor sentiment both global and domestic, remains strong. A number of industries including tech, ecommerce, 3PL, consulting and manufacturing have witnessed rapid growth over the past few quarters and are the demand drivers for office assets across the country.

India occupiers quick to adopt flex space

Occupiers in India have been quick to adopt flex spaces, attracted by the flexibility, agility, and cost-effectiveness they offer. Flex spaces are becoming an integral part of occupiers' portfolio, with its share in occupiers' total portfolio rising to 10-12% in 2023, from 5-8% before the pandemic in 2019, as per interactions with industry experts. Going forward, flex spaces will continue to see strong growth, as they continue to support occupiers in realigning their portfolios and space considerations to suit a hybrid working style while leveraging technology & sustainability to improve efficiency and employee experience.

Peush Jain, Managing Director, Office Services, India, said, "Flex spaces have emerged as a core strategy for occupiers to adopt a decentralized workspace model, serving as a promising alternative to the traditional paradigm. As compared to shorter lease tenures of 1-2 years pre-pandemic, occupiers are now going for longer commitments of 3-5 years with flex space operators as they look to integrate flex space as a long-term solution. During 2022, leasing by flex space operators touched 7 mn sq ft across top 6 cities, highest in any year. This was a 46% YoY increase led by prominent IT hubs such as Bengaluru and Pune."

As of Q1 2023, India's flex space penetration stands at 6.5% and continues to expand, led by occupiers' rapid adoption of hybrid & de-centralised work strategy in a bid to build new age workspaces at an optimal cost. Other markets in the APAC region have seen relatively slower growth in flex space, with flex space penetration hovering around 2-4%.

Flex spaces have also provided companies the agility required to scale operations up or down quickly, allowing businesses to respond effectively to evolving circumstances.

Trends in flex space leasing (Mn sq ft)





Q1 2023

Gross leasing (mn sq ft)






Source: Colliers

Data pertains to Grade A buildings
Data pertains to top 6 cities- Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune
Gross absorption does not include pre-commitments and lease renewals

Tech in Flex

We are seeing in India that technology occupiers have been one of the driving forces of rising flex space demand across the top cities. They currently occupy over 50% of the total flex space across Chennai, Delhi-NCR, Pune and Hyderabad as per industry experts. Other major sectors that are actively embracing hybrid working through flex include Engineering & Manufacturing and BFSI. In larger markets such as Mumbai and Bengaluru, demand by BFSI & Engineering occupiers for flex space is almost at par with Technology occupiers. Demand from Technology occupiers will continue to remain strong in next two years led by a strong recovery and robust hiring plans as businesses continue to focus on rationalizing costs.

Hybrid in Office

Across industries, occupiers are in the process of reassessing their current office footprint to assess, review & determine the most optimal mix for their employees. Several organizations are looking forward to pivoting to some form of a hybrid model for the foreseeable future – blending remote work and physical presence in offices. Despite the experience of working from home for more than two years, major occupiers believe that the physical presence of workers is critical at some regular interval. Hybrid working model has brought flex spaces to the centre stage and has helped occupiers in optimizing costs and ensuring employee flexibility.

The hybrid working pattern has reset expectations of the future workplace and has opened new possibilities for how much flexibility employees can have in choosing, 'where to work.' Companies are now opting distributed workspace strategy to ensure easy commute for their employees, over having one large central headquarter. This has spurred demand for flex spaces across peripheral locations and non-metro cities. Non metro cities such as Ahmedabad, Coimbatore, Indore, Jaipur, Kochi and Lucknow are witnessing heightened activity in flex spaces. This trend is prominent amongst Technology, Consulting and E-commerce companies who are establishing multiple satellite offices in these locations.

Technology and sustainability to drive future workplaces

Developers are increasingly taking cognizance of the evolving needs of occupiers and the need to integrate smart technology to attract tenants. Inclusion of digital infrastructure and smart facilities shall also contribute to achieving greater operational efficiency, reduce energy consumption and higher customer retention. Offices will continue to evolve as firms seek to re-invent their workspaces and incorporate touchless technology and next generation collaboration tools. We expect firms to integrate smart technologies such as Internet of Things (IoT) and predictive analytics for cost optimization and better space utilization.

While green buildings are not a new trend, they are garnering significant interest from occupiers as optimal energy usage and automated services remain key focus areas. During 2022, about 81% of the new office supply across top 6 cities was green certified. Going forward, demand for green certified buildings will continue to rise as occupiers continue to chase green certified buildings to ensure that the workplace meets environmental, energy, and health standards in its design, construction, and performance.

About Colliers

Colliers is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at, Twitter @Colliers or LinkedIn.

Media Contact:
Sukanya Dasgupta
Head of Marketing & Communications | India
+91 981 186 7682


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