Bengaluru tops Grade-A flexible stock list in Asia Pacific; Delhi-NCR 5th: CBRE
1 min read . Updated: 20 Dec 2022, 01:49 PM IST
PremiumIndia leads the flexible A-grade office stock in the APAC region. Occupiers are largely re-engineering their portfolio and workplace strategies to accommodate hybrid working arrangements
NEW DELHI: Bengaluru has topped the Grade-A flexible stock list of 12 Asia-Pacific region (APAC) cities, according to a study by International property consultant CBRE. As of September, Bengaluru recorded 10.6 million square feet of grade-A assets of flexible stock, the highest among all major APAC cities, including Shanghai, Beijing, Seoul, Tokyo, and Singapore.
Other than Bangalore, Delhi-NCR and Hyderabad also accounted for the highest volume of flexible stock in the APAC region. As of September, Delhi-NCR recorded 6.6 million sq. ft. of flexible stock in Grade-A assets, followed by Hyderabad, with 5.7 million sq. ft. Also, in the segment, India and Singapore reported the highest penetration of flexible office space compared to other Asian nations.
Hyderabad recorded the highest penetration with 5.5%, followed by Bengaluru at 5.4%, Singapore at 4.6%, and Delhi-NCR at 4.4%.
The report also observed that post-pandemic, India continues to witness the highest growth in flexi–office market in the APAC region.
“India is leading the flexible A-grade office stock in the APAC region. Occupiers are largely re-engineering their portfolio and workplace strategies to accommodate hybrid working arrangements," said Anshuman Magazine, chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.
This signals a healthy office sector growth amid an accelerated return to office phenomena in India, led by flexible space operators, he added.
“It is also noteworthy that Bengaluru, Delhi-NCR and Hyderabad account for nearly 35% of the total flex stock (A Grade) in the APAC region, with Bengaluru recording the highest flexible stock ahead of Asian cities," Magazine said.
As per the report, total flexible stock volume in the APAC region stood at 76 million sq. ft., recording a 6% y-o-y growth and is 15% above the pre-pandemic growth level during the January-September 2022 period.
During this period, the total number of flexible space centres in APAC stood at 3000. Tech firms (36%) and business services (28%) companies remain the top users of flexible office space, followed by finance, life sciences firms, and retail firms in the overall APAC flex market.
“The flex industry matured over the past two years," said Henry Chin, Global Head of Investor Thought Leadership and Head of Research, CBRE APAC.
“As we approach the new year, companies that continue to adopt flex spaces would be better positioned to embrace hybrid working arrangements, support their employees, and remain agile in their real estate strategies. Additionally, with companies being able to compare and opt for a variety of flex options, operators have identified and are expanding into secondary markets," Chin added.
CBRE APAC study covered 19 major Asia-Pacific markets, including Japan, China, South Korea, Philippines, Hong Kong, Australia, Singapore, and India.
The report lists three major trends shaping the flexible office landscape in 2023, which include flexible space operators offering on-demand memberships to cater to more dispersed workforces resulting from the widespread adoption of hybrid work.
Growing occupier demand for customised enterprise and turnkey solutions to mitigate rising fit-out costs and capex constraints and use of asset-light strategies as flexible space operators form partnerships with landlords using management contracts were among the major trends.
