Hyderabad hosts 4.5 million sq. ft. of the total flex space stock in India and is one among the fastest growing markets in the country, according to a recent report by JLL.
The demand for flexible spaces in large cities such as Hyderabad is likely to grow, with businesses having a greater need to accommodate portfolio expansion and contraction along with crisis support.
“Flex space operators provided organised workspaces with a lock-in-period of 1-2 years. Companies that have pre-leased with scheduled delivery over next 1-2 years have shown interest in such flex spaces to have their temporary offices. Apart from big MNCs, Hyderabad also houses many start-ups and small companies in the field of Consulting, IT, and logistics. Flex spaces have become financially feasible for such small players as well with low capex,” said Sandip Patnaik, managing director and head (Telangana & Andhra Pradesh), JLL India.
The flex space market in Hyderabad saw major traction from mid-2018 and peaked in 2019. Flex spaces accounted for 28% of total office space leasing in 2019 in the city. While flex spaces already enjoyed popularity amongst start-ups and small-sized companies, there has been an increased traction amongst large BFSI and IT-ITeS occupiers mainly as managed office spaces as well as incubation spaces. This supports the significant expansion by flex space operators in the city during the last 2-3 years.
As per a recent report by JLL strong signs of recovery were witnessed in the Hyderabad office market in Q3 2020 with a healthy gross leasing at 1.9 million sq ft. At the same time, net absorption grew by 31% from the previous quarter to 1.5 million sq ft in Q3 2020.