Introduction
Despite the economic downturns, the Indian economy shines brighter than ever with the accelerating office leasing activity in Q2 (April, May, and June) of 2023. After the COVID-19 pandemic, with businesses gearing up to get back to office space, they have met a surprising rise in demand for commercial properties across the country. As a matter of fact, during Q2 2023, the office space market in India increased by approximately 12%.
The Indian office space market is expected to grow at a Compound Annual Growth Rate (CAGR) of USD 91.08 billion by 2028. Read on to find out more about the trends or factors that are continuously resulting in the unprecedented growth of the office space market in 2023.
Emerging Trends of the Office Space Market 2023
In recent times, the business sector in India has witnessed significant growth and is gaining traction due to a large inflow of growth capital. Moreover, such businesses accounted for a substantial 35% share of the total office space transactions in the first half of 2023, leading to rising demand for office spaces.
As the business sector grows, it creates job opportunities, and with this, the need for a more skilled workforce arises. In order to cater to today’s generation, businesses need to align themselves with changing dynamics. Listed below are a few trends that have seen a splurge during 2023, leading to an increase in the office space market.
- Wellness-Oriented Office Space
Today’s generation, or Gen Z, is more inclined towards a workspace that respects and caters to their mental well-being. Unlike traditional office spaces with fixed cubicles and blatant colors, the office space market of 2023 is more focused on a positive and wellness-oriented environment. Incorporating wellness zones that promote relaxation and physical activity can be a great way to retain talent. These areas may include anger management rooms, snooze rooms, or mortation rooms. This trend has been booming, but it still has a long way to go.
- Flexible Workspaces
With the changing demands of the employees and the post-pandemic work model, corporations are leaning more towards a shared office space. A flexible workspace allows an employee to work as per their requirements and not be limited to a cubicle. This type of workspace can be customized as per the organization’s and employees’ needs and include amenities like private cabins, a pantry, conference rooms, gaming and VR rooms, and medical rooms. It provides the employee with a sense of ownership and creates a dynamic work environment. As a matter of fact, during Q1 (January, February, and March) 2023, flexible office space was a dominating force, accounting for 27% of gross absorption.
- Tech-Enabled Working Environment
The office market of today is indeed staying in alignment with rapidly advancing technology. Flexible workspaces are being constructed with state-of-the-art technology and infused with AI and IoT-enabled services. This keeps the employees motivated and eases up their daily tasks.
The supply of office spaces reached 12.4 million during Q2 of 2023. Moreover, Bangalore, Chennai, and Hyderabad were at the forefront of supply addition, contributing a total of 84%. All in all, throughout the first half of 2023, 24.2 million square feet of new office space were completed.
Conclusion
The first half of 2023 concluded with success, and the second half is anticipated to achieve a net absorption level of around 36–39 million square feet. The resilience of the Indian economy, coupled with the unstoppable drive of businesses to adapt and thrive, has led to a resurgence in demand for office spaces like never before. If you plan to set up a flexible and managed office space, then Smartworks is your one-stop solution.
