A CBRE survey predicts a significant rise in flexible office spaces, with 58% of companies expected to expand their portfolios by 2026. Driven by robust occupier activity and an increasing preference for flexible arrangements, the trend sees domestic firms leading over American corporations. This strategic shift aims to accommodate growing workforces and enhance operational efficiency.
The latest CBRE South Asia survey reveals a significant shift in the office space landscape. The key finding is that 58% of companies are projected to expand their flexible office space portfolio by 2026, a substantial increase from the current 42% as of the first quarter of 2024. This trend, detailed in the ‘2024 India Office Occupier Survey,’ underscores a growing preference for flexible workspace solutions.
According to the survey, about 30% of office occupiers plan to prioritise expanding flexible office spaces as a key strategy within the following year. This trend is particularly pronounced among domestic firms, which prefer flexible spaces more than their American counterparts. Anshuman Magazine, Chairman & CEO of CBRE for India, South-East Asia, Middle East & Africa, highlights the dynamic changes in the sector: “The robust surge in occupier activity within the Indian office sector, underscored by 2023’s absorption figures—which are the second highest ever recorded—reflects a heightened occupier confidence, driven by an expanding commercial office footprint and a growing demand for high-quality spaces.”
Flexible space operators have significantly impacted the Indian office leasing ecosystem, consistently accounting for more than 15% of quarterly leasing activities. CBRE forecasts this figure to reach 80 million sq ft. by the end of 2024. In response to these changing demands, occupiers are expected to diversify their office locations over the next two years, integrating a mix of traditional and flexible spaces to cater to a growing workforce and client base.
The survey also unveils various strategies adopted by occupiers. Notably, 17% of occupiers focus on optimising and consolidating their office portfolios into fewer locations. This approach aims to streamline operations and reduce the costs of maintaining multiple office spaces. This trend is complemented by a shift towards quality, focusing on ‘flight-to-quality’ relocations expected to dominate the next couple of years.
The report also notes a shift towards an “office-first” approach among Indian companies, tightening hybrid working policies that have been popular over the past two years. Despite the flexibility, there is a notable preference for office-based work, with 90% of respondents favouring at least three office days per week and many opting for full-time office work.
CBRE foresees that modern and sustainable office development, equipped with amenities like recreational facilities and improved access to public transport, will likely capture a larger market share. In addition, occupiers are urging landlords to adopt various building-level enhancements, including environmental, social, and governance (ESG) measures, health and wellness certifications, and improved energy-efficient solutions. These initiatives are part of a broader strategy to enhance employee well-being and office experiences, which are crucial factors in the ongoing adaptation to post-pandemic office dynamics.
