Explosive Development in Commercial Housing in 2022: A Shift to Flex Areas
Wiki Article
2022 was an extraordinary milestone in the commercial realty, witnessing an amazing office occupancy rate of 50.8 million square. ft. according to reports from industry experts. This figure is not only greater than the pre-pandemic average for the most recent five years (2015-2019) by 3.1% as well as standing as the second-highest absorption rate in the past decade just behind numbers for 2019. This surge in office occupancy, brought on by the return of work across different sectors, increases the net absorption rate but it also paints the picture of stability in the market and a positive outlook for the future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
In response of evolving business requirements and portfolio strategies, there's been a growing need for flexible, agile, and contemporary workplaces. This trend towards flexibility in operational processes has helped propel flexible workspaces to the forefront as the most preferred option among those who are occupying. In the last 12 months, there has been an enormous shift of businesses toward flexible workspaces, driven by the necessity to diversify portfolios of workspaces and cater to the evolving needs of the employees' new norm.
Harsh Binani, co-founder of Harsh Binani Smartworks the largest Indian enterprise-focused workspace platform. He expressed great optimism regarding his commercial real estate industry's development. He highlighted the exponential expansion of flexible spaces within the commercial realm, highlighting the rapid growth of flex spaces. Binani anticipated a significant phase of growth, anticipating significant growth and consolidation with large operators in the flex sector over the five years to come.
Benefits Fueling the Flex Market Growth
The widespread acceptance of flex spaces across various sectors illustrates their many benefits. The Harsh Binani main drivers behind the rise of these spaces include real property cost optimization scaling, flexible lease tenures and strategies for attracting talent, extensive managed services, as well as an appeal to modern amenities and workspaces. Binani further emphasized this view by saying that "Flex is the new way of working," by citing positive trends in leasing for unicorns and enterprises, which comprise a majority or more of their assets.
Growth Trajectory and Market Predictions
The flex space industry, rising from turmoil in markets, is seeing a significant increase in growth. Industry experts expect an increase in this upward trend and predict a double-digit increase in 2023. The hybrid office environment is anticipated to remain the preferred option for occupiers through 2023, thereby securing it as the largest market segment for flex spaces. There is a good chance that flex spaces' market penetration will climb to 4.2 percent by 2023. Industry-wide expectation of doubling the footprint in the next two to three decades.
The Future Outlook
In the midst of increasing demand for adaptable and well-equipped work environments, the flexible space segment is poised for substantial growth. The transformative shift in workplaces and portfolio strategies will continue to drive the growth in requirements for flexible modern and agile workspaces across various sectors and companies.