Explosive Progress in Industrial Real Estate in 2022: A Change to Flex Spaces
Wiki Article
2022 was an extraordinary milestone in the commercial real estate. We witnessed the highest office utilization rate of 50.8 million square. ft. according to industry reports. This number not only exceeds the average pre-pandemic of the past five years (2015-2019) by 3.1% in addition, it is also regarded at the second highest rate of absorption in the last decade surpassing the 2019 numbers. This increase in offices, driven by the return to work across various sectors, enhances net absorption but also paints a picture of market stability and a hopeful future.
The Rise of Flex Spaces: A Paradigm Shift in Workspaces
As a result of changing business requirements and portfolio strategies there's a growing demand for flexible, agile and modern workplaces. This shift toward flexibility in businesses has led areas that are flexible into the spotlight as the most preferred option among the occupiers. The past 12 months witnessed an enormous shift of businesses toward flexible workspaces driven by the imperative to diversify their portfolios and be able to cater to the needs of employees' changing needs.
Harsh Binani, the co-founder of Smartworks India's largest business-focused workspace platform, expressed tremendous optimism about what he sees as the future of commercial real estate sector's progress. He emphasized the rapid increase in flex spaces within the commercial space, highlighting their rapid growth. Binani predicted a robust period of growth, anticipating substantial expansion and consolidation of large operators in the field of flex within the next five years.
Benefits Fueling the Flex Market Growth
The widespread use of flexible spaces across sectors underscores their numerous advantages. The key drivers that are driving the growth of flex spaces are real property cost optimization, scalability, flexible lease tenures, employee strategies, high-quality managed services, and an appeal to modern amenities and workplaces. Binani further reinforced this notion by saying that "Flex is the new way of working," using strong leasing trends among companies and unicorns, which are currently around 80% in their total portfolio.
Growth Trajectory and Market Predictions
The flex space market, emerging from uncertainty in market prices, is Harsh Binani experiencing a rapid increase in growth. Experts in the field predict that the market will continue to grow on this ascending trend, anticipating a double-digit growth in 2023. The hybrid office model is anticipated to remain the preferred option for occupiers throughout 2023, solidifying this market's share. flex spaces. Future predictions indicate that flex workspaces' market penetration will rise to 4.2 percent by 2023, and there are industry predictions of doubling their footprint in the next two or three years.
The Future Outlook
In the wake of growing demands for adaptable and well-equipped work environments, the flex space segment is predicted to expand significantly. The transformational shift in workspaces and strategies for portfolios will continue to fuel the rise in demand for flexible, dynamic, and Harsh Binani modern workspaces across diverse industries and companies.