The year 2022 marked an unimaginable milestone in commercial realty, witnessing the highest office utilization rate reaching a staggering 50.8 million sq. ft. according to industry reports. This figure not only surpasses this year's pre-pandemic median of prior five years (2015-2019) by 3.1% It also stands in the second position for absorption rates in the past decade, trailing only behind the 2019 figures. This rise in office utilization, fueled by the return to work across various sectors, is not just a boost to the absorption of net workers but also paints a picture of stability in the market and a positive outlook for the future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
In response to changing business expectations and portfolio strategies there's an obvious demand for flexible, agile and modern workplaces. This shift towards flexibility in operational processes has helped propel flexible workspaces to the forefront as the most preferred option among occupiers. The past 12 months witnessed an enormous shift of businesses to flexible workspaces. This is driven by the need for diversification of portfolios as well as catering to the needs of workers' new demands.
Harsh Binani, co-founder of Smartworks India's leading enterprise-focused workspace platform, expressed his confidence in Commercial real estate market's trajectory. He pointed out the phenomenal increase of flex spaces within the commercial property landscape, stressing their rapid growth. Binani predicted a robust phase of growth, anticipating significant expansion and consolidation among large operators in the field of flex within the next five years.
Benefits Harsh Binani Fueling the Flex Market Growth
Flex spaces across sectors underscores the numerous benefits they offer. Some of the Harsh Binani main factors driving the growth of flexible spaces include real estate cost optimization scaleability, flexibility of lease tenures, strategies for talent, complete managed services, and the appeal of modern, amenity-rich workspaces. Binani has further supported this idea by saying that "Flex is the new way of working," and citing positive trends in leasing for large and small enterprises, which currently constitute around 80% or more of their assets.
Growth Trajectory and Market Predictions
The flex space market emerging from the shadows of market volatility, is currently experiencing an increase in growth. Experts in the field predict a continuation of this upwards trend, with forecasts of double-digit growth in 2023. The hybrid office style is anticipated to remain the preferred choice for those who work throughout 2023, solidifying markets for flexible spaces. The predictions suggest that flex spaces are expected to have a market share of will grow to 4.2 percent by 2023. There are also industry-wide expectation of doubling the footprint in the following two to three years.
The Future Outlook
As the demand for flexible and well-equipped work spaces, the flex space segment is set to experience significant growth. The transformative shift in workspaces and strategies for portfolios will continue to drive the increase in need for flexible, innovative, and modern workplaces across various industries and companies.