Pune-Tech-tonic shift to flex, to cross 8 million sq ft by 2025
Tech firms becomes the largest occupier of flex space and contributed to 43 per cent of the total seat uptake during 2020-H1 2023, followed by Engineering & Manufacturing at 27 per cent share.
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Hyderabad: According to Colliers’ latest report ‘Pune-Tech-tonic shift to flex’, Pune’s flex space stock is expected to cross 8 million sq feet by 2025, accounting for 10 per cent of the total office stock of the city. Driven by healthy investment and robust demand from technology & other mainstream sectors, 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.
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.
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 per cent 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 per cent. At an all-India level, share of flex space in occupiers’ portfolio has risen, from 5-8 per cent in 2019, to 10-12 per cent in 2023.
Tech firms becomes the largest occupier of flex space and contributed to 43 per cent of the total seat uptake during 2020-H1 2023, followed by Engineering & Manufacturing at 27 per cent 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 per cent of Pune’s total flex stock followed by CBD at 31 per cent. Kalyani Nagar, Mundhwa and Yerwada are some of the popular flex locations within CBD.
“Pune has emerged as one of the popular top flex space destinations Pan India, registering a significant growth in the last 5 years. Share of Pune in Pan India flex leasing has increased manifold from 5 per cent in 2018 to 25 per cent in 2022. Flex spaces in the city are also seeing increased occupancy levels, as enterprise outsourcing has become mainstream. As flexibility, scalability, and cost optimization remain ‘table stakes’ for occupiers’ office expansion strategies, flex spaces will continue to gain prominence in the city. A greater focus on flight to quality, increased customization and amenitisation would further provide a business case for a rental upside.” says Animesh Tripathi, Managing Director, Pune, Colliers India.
“Flex spaces have seen remarkable growth in Pune in the last 5 years with its share in the city’s office stock growing from 2.8% in 2018, to 8.3% as of June 2023. Led by rising demand from Technology and Engineering & Manufacturing sectors, flex space operators are rapidly expanding their footprints in the city." said Vimal Nadar, Senior Director and Head of Research, Colliers India
"While smaller operators continue to foray into the space, market continues to remain consolidated with the top 5 operators holding a little more than three-fourth share. Amidst an evolving business environment, occupiers will continue to commit towards Grade A operators seeking more scalability options across locations with increased customization." He added
