Over the last few years, the commercial real estate sector has undergone a notable transformation as a result of tech outsourcing. Additionally, the pandemic influenced the way companies functioned and strategized—leading to a re-evaluation of working models.
As the workplace witnessed a transition to a Work-from-Anywhere setup, the demand for flexible spaces is on the rise.
The flex workplace segment has positioned itself as one of the major sellers for the office market in India. With the advent of the gig economy and ease of commute, flex is the future of workplace. In fact, owing to the increasing shift, its expansion across cities, and the fillip provided by sustained funding, India’s flexible stock is expected to grow by 10-15% (y-o-y) from the current 36 Mn sq. ft in the next three years. Here’s why:
- Operators to focus on innovation: According to the operators, as flex will dominate the corporate world, tech deployment will be crucial to improving their tenant profile. Going forward, operators will place their focus on higher flexibility and innovative solutions/deal structures such as reverse officing, fit-outs as a service, and pay-per-use models, among others.
- Health and wellness to drive occupier interest: Occupiers are likely to exhibit an increased inclination towards agility/flexibility to meet RE requirements. As health and wellness initiatives are priorities by businesses, occupiers will sign up for flexible spaces that propel employee productivity safety.
- Landlords to lay focus on partnerships: Understanding the growing need for agility and flex, landlords’ management agreements and portfolio tie-ups with operators may become more common. Further, to improve their product offering, landlords would want flexible spaces as part of their buildings – along with an increased focus on ‘amenitization’ for F&B, living convenience, meetings/events, and wellness.
Tech, and Wellness
With industry’s major stakeholders expecting flex to be the way forward for business continuity, trends like the fluidity of workforce (including mobile teams and calibrated headcount), touchless technology, core + flex strategies, portfolio agility, and satellite offices will be some of the major growth drivers for the flexible space industry. Further, cautious expansion by operators in tier-1 and tier-2 cities in the medium run is expected to go a long way for the flex industry.
As people-first approach becomes an all-time necessity, technology deployment shall remain centric to workplace design as businesses focus on aligning their continuity plans with employee wellness. Technology implementations such as smart parking, touchless elevators, real-time floor plan views, and infrared biometrics can be some interventions to ensure social distancing and employee safety at the workplace.
Technology deployment will also further the demand for new-age offices, further bringing flex to the limelight.
The Way Forward
With the evolution of the workplace, there’s a clear indication of an accelerated change in performance and expectations from an office space. Firms have been successful in changing their strategies to ensure seamless functioning, while effectively leveraging potential changes in work styles.
As location-independent work practices continue, the demand for physical workspaces is expected to be driven by flex offerings. These offerings will act as collaborative spaces aimed to maintain a sense of corporate culture, ensuring rejuvenated team spirit and productivity, and ensuring higher levels of employee satisfaction.
With the propulsion of one of the world’s biggest vaccination drives in India, flex can be expected to provide a further boost to the growing commercial RE segment – and will further accelerate the overall recovery of the real estate sector by attracting investor interest and inducing innovation.
Views expressed above are the author’s own.
END OF ARTICLE