Flex Space To Account For 10% Of Total Office Stock Of Pune
Driven by healthy investment and robust demand from Technology & other mainstream sectors, Pune’s flex space stock is expected to cross 8 million sq feet by 2025, accounting for 10% of the total office stock of the city, according to Colliers’ latest report ‘Pune – Tech-tonic shift to flex’. Pune’s flex space market has seen significant growth during the last five years, led by a burgeoning young population, presence of large tech corporates, and proliferation of numerous startups. Occupiers’ hybrid workstyles have further accelerated the demand for flex spaces in the city, especially post pandemic. Since 2018, Pune’s flex stock has witnessed a four-fold rise and currently stands at 5.4 million sq feet as of June 2023. This translates to 8.3% of the total Grade A office space of the city, the highest across the top 6 cities. While Bengaluru remains the largest flex space market Pan India in terms of size of flex stock, Pune has surpassed Bengaluru in flex space penetration, at 8.3%. Flex spaces have been at the forefront in enabling new workspace models such as Flex + Core, distributed workplace strategy and Hybrid working for occupiers, and have become an integral part of occupiers’ portfolio. At an all-India level, share of flex space in occupiers’ portfolio has risen, from 5-8% in 2019, to 10-12% in 2023. To meet the burgeoning demand from occupiers, top operators in the city have expanded rapidly over the last five years, with annual space uptake rising multi-fold each year. During 2022, flex space operators leased 1.77 million sq feet of office space, accounting for 35% of the total leasing of the city. The first half of 2023 also witnessed robust leasing by the flex space operators at 0.57 million sq feet, about 22% of the total leasing. As a result, flex space stock also witnessed a significant 4X rise, from 1.3 million sq feet in 2018, to 5.4 million sq feet as of June 2023. As majority of Technology occupiers have adopted ‘Hybrid work model’ as a long term strategy, flex spaces have become an integral part of Tech occupiers’ real estate portfolio. Technology sector remained the top occupier of flex space, and contributed to 43% of the total seat uptake during 2020-H1 2023, followed by Engineering & Manufacturing at 27% share. As hybrid working is expected to remain a mainstay for Technology occupiers, they will continue to lead flex space demand in the city. Pune’s Baner-Balewadi and CBD are amongst the top 10 flex micro-markets Pan India amongst ORR & SBD 1 (Koramangala, CV Raman Nagar, IRR, Indiranagar, and others) in Bengaluru and SBD (Madhapur, HITEC City, Kondapur and Rai Durg) in Hyderabad. As of Q2 2023, Baner-Balewadi accounted for 44% of Pune’s total flex stock followed by CBD at 31%. Kalyani Nagar, Mundhwa and Yerwada are some of the popular flex locations within CBD. Going forward, Viman Nagar and Kharadi also hold significant potential for flex space expansion in next the 2-3 years due to robust supply pipeline, well-established infrastructure, and the upcoming metro connectivity in the region.
Tags : investment demand technology Pune flex space Colliers growth population hybrid workstyles Baner-Balewadi