New Delhi [India], January 29 (ANI): Tier-II cities in India emerged as new ground for flex office operators, real estate consulting firm CBRE South Asia said in a report. The report highlighted that nearly 26 major flex office operators recorded presence across 10 Tier II cities in 2023.
Flex space can generally be defined as any building or commercial property that has a mixture of warehouse space, office space, and/or retail space.
These 10 cities include Chandigarh, Jaipur, Lucknow, Coimbatore, Kochi, Thiruvananthapuram, Vishakhapatnam, Ahmedabad, Indore, and Bhubaneshwar. As per the report, flexible workspace operators are recognising the potential of these markets and are rapidly expanding their presence, providing options for start-ups as well as established firms.
The report noted that Ahmedabad has the highest flex stock, with more than 0.5 mn. sq. ft. as of September. Other cities, including Chandigarh, Jaipur, Coimbatore, Kochi and Indore, have flex stock between 0.3 and 0.5 mn. sq. ft.
According to the report, Lucknow, Thiruvananthapuram, Visakhapatnam and Bhubaneswar have flex office stock lower than 0.3 million sq. ft.
Prominent flex operators such as Awfis and Incuspaze recorded presence in more than five cities, including Jaipur, Kochi, Lucknow, Thiruvananthapuram, Ahmedabad, Indore and Bhubaneswar. Other players who forayed into these cities include IWG, IndiQube and Smartworks, among others.
According to the report, overall office absorption across the 10 cities stood at ~1.6 mn sq. ft. in January-September 2023 period, led by Ahmedabad, Jaipur, and Thiruvananthapuram. The total office stock in these 10 tier-II cities stood at ~68 mn. sq. ft. as of September, with Ahmedabad, Kochi and Thiruvananthapuram each boasting office stock higher than 7.5 mn. sq. ft.
The total office supply recorded in these 10 cities was 3.4 mn. sq. ft. during January-September 2023. The top cities dominating supply addition in 2023 include Ahmedabad, Kochi, and Indore.
Tier-II cities are fast emerging as the next growth frontier for the office sector. With their growing talent pool, competitive real estate costs, and improving infrastructure, these cities are well-positioned to attract more businesses in the future.
Traditionally, office spaces in smaller cities have been dominated by Grade B buildings, characterised by smaller floor plates, and limited amenities. However, recognising the growing demand, Tier-II cities have been witnessing the development of modern office parks.
Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “India’s tier-I cities have been the main drivers of economic growth in the country being prime employment hubs. At the same time, India’s non-metros, referred to as tier-II and tier-III cities, have primarily been seen as residential or industrial centres, developing as hubs of trade and businesses over decades.”
“The growth of micro, small and medium-sized enterprises (MSMEs) has been a key driver of economic activity in non-metro cities, providing a vital boost to local economies,” Magazine added. (ANI)
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