Enterprise Flex Leasing hits all-time high in 2022
What is Flex Space
Business Everywhere are changing their commercial real estate strategy: small & mid- sized companies are searching for real estate flexible to their needs at lower investment risks while maximizing profits, so to cater this need Flexible space or Flex space come into picture
Flexible Space or Flex Space is any commercial real estate that offers a business space( usually-single story Building) that can be used as multi- purpose workspaces to meet business needs, flex Space commonly combines warehouse, retail, offices and is grouped by shared common areas such as reception, lounges, conference rooms The demand for flex spaces in commercial real state is rising because of their unique adaptability characteristics,
Benefits of flex spaces in commercial real estate
(a)Lower Leasing cost
(b)Scalability
© Lower Start-up Cost
(d) Networking at flex Spaces
The calendar year 2022 flex seat take-up is hit an all-time high of 131,700+ seats, easily crossing the pre-pandemic peak of 2019 by 2X. The annual flex seat take-up in 2022 alone has surpassed the combined total of the pre-COVID years of 2018 and 2019 as well as the past two years 2020 and 2021.
Flex seat leasing by enterprises in the form of managed or enterprise solutions recorded its strongest quarter yet with ~38,140 seats taken up in Q4 2022. Demand for flex continues to remain on an upward curve with the flex operators’ footprint growth an apt marker of the rising role that flex is playing in real estate portfolio strategies. Bengaluru, Pune and Delhi NCR led in terms of total flex seat leasing in 2022, together contributing a nearly 60% share, followed by Hyderabad and Mumbai. In fact, all cities including Chennai hold a double-digit share in flex seat leasing during the year
In terms of enterprise deal size, deals above 500 seats accounted for a one-third share for the full year 2022, highlighting the rising demand for large, enterprise bespoke/managed spaces as part of overall portfolio strategy. The fast-growing flex segment contributed a share of 18.8% in gross leasing during the quarter. On a quarterly basis, the share of this segment has also risen from 14.1% to 18.8%. During the whole year of 2022, the flex segment leased over 9.2mn sq. ft of Grade A space, second only to the 10.2mn sq. ft leased during 2019.
Sources; -JLL Research