New avatars of office stock
Growing demand for flexible and co-working spaces led to the entry of more players in this market
image for illustrative purpose
Hyderabad: Post pandemic, real estate sector has seen tremendous changes particularly in the office space market. Owing to remote work culture in the IT industry, many investors were worried about this segment. However, the industry experts are bullish on the Grade-A office stock. Surprising even them, office space has bounced back in various forms with multiple leasing options to the tech firms and MNCs.
According to real estate consultancy Anarock report, the share of IT/ITeS sector declined to 36 per cent in July-December (H2) of 2022 from 49 per cent in January-June (H1) of 2021. However, the demand office space has been constantly increasing for its other avatars like – flexible spaces, co-working spaces, managed office spaces, and sector-specific office spaces.
Out of a total net absorption of 20.8 million sq ft of office space leased across the top seven cities in H1 2022, the share of co-working spaces stood at 20 per cent, while it was only 6 per cent in H1 2021. As many IT companies and startups prefer flexible and co-working spaces over traditional office stock, more players are entering in this market.
Skootr, a premium managed office space provider, offers workspace as a service. "The company currently manages office space of over 1 million sq ft across 11 centres in Delhi, Gurugram, Jaipur, Hyderabad and Bengaluru. It eyes to double the Grade A managed office space operations in Hyderabad and Gurugram by next fiscal," Puneet Chandra, Director & Co-Founder of Skootr, told Bizz Buzz.
He said, "In the last quarter, Skootr invested over Rs 75 crore to expand the managed office portfolio and it is looking forward to more than double the inventory in Hyderabad. Real estate occupiers are looking out to design the next generation of flexible office spaces that will include the right mix of private and open space to meet occupiers and employees' needs."
Dwaraka Infrastructure, which is into the office space segment, has recently opened an exclusive co-working space for startups - Dwaraka Pride in Hyderabad. Overall, it has 13 projects with a total of 3.2 lakh sft office space in the city with seating capacity of 6,500. It plans to complete six new projects with a total office space of two lakh sq ft and 4,500 seats by March 2024.
Bengaluru-based Workafella provides custom-built office formats for large corporates depending on the city. Establishing its first chain of co-working spaces in metro cities, it is now looking to launch the largest coworking centers in Hyderabad and Chennai and aims at having 1 lakh workstations by the end of next year.
The Quorum, work and social lifestyle club, has recently announced its biggest club in Hyderabad, which will become operational by mid-2023. In this club, it is also providing the co-working facility with 110 seats. "The seats are typically priced 30 per cent higher than those offered by other co-working operators as we offer club facilities to the members," said Vivek Narain, Founder & CEO of The Quorum.
Apart from commercial real estate players, some organisations have come forward to develop and offer sector-specific office spaces. Lighthouse Canton, a global investment institution, is providing real estate asset management services through its arm - Lighthouse Canton Real Estate (LCRE). It is focusing on real estate facilities dedicated to life sciences sector.
The LCRE has co-invested in Neovantage Innovation Parks, which owns and operates 8 lakh sq ft space in Genome Valley, Hyderabad. To cater to the growing demand for leased laboratory spaces in the pharma and life sciences industry, Neovantage Innovation Parks has a further pipeline of 2 lakh sq ft of 'Grade A' buildings under development.
