Are Flexible Offices Here to Stay in Indian Commercial Real Estate Market?

As daily life as well as work life returns to being the way it used to be before the Coronavirus episode there are many companies currently examining current conditions and incorporating pandemic-driven trends into workplaces.

Post-pandemic, India's tier-2,3 cities have become real estate hotspots, boosted by infrastructural development. Affordability drives considerable demand from corporations looking to establish bases in these areas. Reverse migration and a larger talent pool in developing markets have also fuelled demand for flexible workspaces.

The economy is improving, and office space is in high demand. 

According to a commercial real estate research, gross office absorption will reach 45-47 million sq. ft. in 2022, up 13-14 percent from 2021. It's all about flexibility, and according to studies, demand for offices in tier-2 cities like Chandigarh has risen significantly.

According to another industry study, co-working and managed office spaces absorbed 21% of total lease volume in Q1 2022, up from 11% in Q1 2021. 

Today, firms are looking for possibilities to grow and open satellite/regional offices outside of major cities. 

As a consequence of this reverse migration, decision-makers are now focused on onboarding people locally, resulting in an increase in office demand. The hybrid approach has become the standard, and businesses are embracing it to enable employees to work remotely while staying near to home.

Tech companies, BFSI, manufacturing, startups, and boutique enterprises are likely to drive considerable increase in office space take-up. To prevent future uncertainties and hazards, organisations are increasingly concentrating more on cost-optimization. Real estate developers have noticed the trend and are offering high-end offices in these areas with cheap capital investment, facility management, and maintenance costs.

Tier 2 cities with better internet penetration, infrastructure, and technological developments are luring businesses seeking cost, convenience, and flexibility. 

Well-managed offices with full amenities are especially appealing to young entrepreneurs and startup founders. Moreover, tier-2,3 cities have reduced business costs. They are also the next logistics and storage centres. Better connectivity, industrial corridor development, and SEZs have boosted these regions' real estate values, making them the future investment magnets.

Tier-2,3 cities have great potential and public opinion has turned in their favour. 

In the next quarters of 2022, organisations will increasingly concentrate on the untapped potential of these new industries for long-term financial sustainability.