Mumbai, Feb 17 : The share of the flex space segment has risen to a substantial 19.8 per cent in the annual office leasing numbers in India to cross 15 million square feet (sq ft) in 2024 , its best share so far, according to a JLL report released on Monday.
It thus became the second-biggest occupier segment behind Tech in terms of its contribution to the leasing growth story that underpinned the 2024 office market performance.
Delhi NCR stole a march over all others with flex operators’ activity hitting an all-time annual high in 2024, resulting in the city holding a substantial 42 per cent share in leasing by the flex segment across the top seven cities.
Pune in recent times has emerged as a market witnessing intense expansion by flex operators and it was second with a 14 per cent share, pushing Bengaluru which is the biggest flex ecosystem in the country to the third spot with a 13 per cent share, the report by the real estate firm states.
“The flex space sector in India has not only met but exceeded expectations, leasing over 15 million sq. ft in 2024 – a new pinnacle that underscores its pivotal role in shaping India’s evolving office landscape.
“With a robust pipeline of IPOs, strong occupancy rates, and significant PE backing, flex space has solidified its position as a long-term player in India’s commercial real estate. Our projections indicate that by 2026, the operational footprint of flex space across India’s top seven cities will surpass 100 million sq. ft, strengthening its status as a key element of the office market growth story,” said Samantak Das, Chief Economist and Head of Research at JLL in India.
“India’s flex space market has reached unprecedented heights in 2024, with total stock hitting a staggering 74 million square feet across the top seven cities. Bengaluru leads the charge, commanding a third of the operational flex footprint.
“The sector’s exponential growth is further evidenced by surpassing the million-seat milestone, now boasting over 1.1 million operational flex seats.
“Enterprise demand has skyrocketed, with a record-breaking 183,200 seats leased to businesses in 2024 – a 9.2 per cent Year-on-Year (YoY) increase.
“While Bengaluru and Delhi-NCR continue to dominate, Chennai’s emergence as the third-largest market for enterprise seat take-up signals a broader, nationwide embrace of flexible workspace solutions,” said Rahul Arora, Senior Managing Director (Karnataka, Kerala), India, JLL.
In fact, Pune has witnessed the maximum growth of around 33 per cent CAGR in its flex stock since 2019, surpassing the growth momentum across all other cities.
Driven by the growth of managed players who provide fully customised, serviced office offerings to large enterprises, the average size of flex centres in terms of new space take-up has shown a remarkable growth of 21.4 per cent from 2023.
The average deal size in 2024 was ~63,000 sq. ft. This ties in directly to corporations housing significantly large operations/teams in such flex centres, even as they are utilising the modern layouts, tech-enabled offices and amenities as key drivers for ramping up office occupancies and return to office percentages, the report added. (With inputs from IANS)