CBRE South Asia Pvt. Ltd. has unveiled the findings from its latest ‘2024 India Office Occupier Survey’, revealing a significant uptick in companies planning to allocate more than 10 per cent of their office portfolio to flexible workspaces, rising from 42 per cent in Q1 2024 to an anticipated 58 per cent by 2026.
The survey underscores a growing preference for flexible office solutions and a strong commitment to environmental, social, and governance (ESG) goals among Indian firms. Over the next year, approximately 30 per cent of companies intend to expand their use of flexible office spaces as a central component of their workplace strategy, adapting to evolving work patterns and employee expectations.
Flexible workspace providers are playing a pivotal role in the Indian office leasing market, consistently accounting for more than 15 per cent of quarterly leasing activities. CBRE projects that the total flexible space inventory will reach 80 million square feet by the end of 2024.
In response to escalating demand, companies are likely to expand into multiple office locations to accommodate growing teams and explore new markets. Many are adopting a decentralized office strategy, blending traditional and flexible spaces tailored to specific business needs.
However, alongside this trend towards flexibility, about 17 per cent of companies aim to consolidate their office spaces into fewer locations to enhance operational efficiency and reduce costs. This strategy aligns with the broader trend of companies relocating to higher-quality office spaces to better meet their evolving requirements.
The survey also reveals that nearly 70 per cent of occupiers plan to expand their office portfolios over the next two years, with significant growth expected across various sectors, including Banking, Financial Services, and Insurance (BFSI), Global Capability Centers (GCCs), and technology firms.
Despite the prevalence of hybrid working models, there is a noticeable shift towards an “office-first” approach. A substantial majority of respondents (90 per cent) prefer to be in the office for at least three days a week, underscoring the value placed on in-person collaboration and structured work environments.
Sustainability is a key focus for occupiers, with 67 per cent of companies planning to allocate more than 5 per cent of their project budgets towards ESG initiatives. This emphasis on sustainability is prompting landlords to enhance energy efficiency, provide wellness facilities, and integrate green building certifications into their properties.
The survey also highlights growing interest in expanding into Tier-II and Tier-III cities, driven by their skilled workforce, cost competitiveness, and improving infrastructure. Technology and BFSI sectors are particularly active in these regions, with domestic firms showing a preference for expanding operations in smaller cities in the coming years.
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa at CBRE, commented, “The significant increase in occupier activity in the Indian office sector, as evidenced by the absorption figures of 2023, underscores a notable trend.” He emphasized, “This surge reflects heightened occupier confidence, driven by expanding commercial footprints and pent-up demand from businesses that deferred leasing decisions during the pandemic.”
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, noted, “The survey provides valuable insights into evolving occupier preferences amid business growth and future aspirations.” He added, “There is a clear inclination towards ‘office-first’ policies, reflecting a swift return to in-office work patterns. Occupiers are also showing strong confidence in the Indian office market, with robust intentions to expand portfolios and prioritize workplace transformation to foster positive employee experiences.”