Why managed office space growth seems unstoppable in the office segment

Recent reports from multiple real estate consultancy firms have highlighted a consistent trend in the office market – the increasing popularity of flexible and managed office spaces. These reports unanimously indicate a significant growth in the leasing of flex space. For instance, according to Q2 2023 (calendar year) office market report by Colliers—Leasing by flex spaces surged 58% YoY during the quarter, as occupiers continued to adopt flex spaces as a long-term strategy.

The requirement towards the flexible space segment continues to grow in 2023, as ‘core + flex’ approach is at the forefront for all office stakeholders. As per the latest CBRE research report, flexible office spaces have emerged as top short-term real estate portfolio strategy for corporates as about 47% of them intend to increase the use of flexible office space over the next 12 months in India.

Occupiers have placed a stronger focus on transforming the workplace and enhancing the employee experience in order to attract a higher number of employees back to the office.

Corporate occupiers are actively seeking to optimize their portfolios and prioritize cost-effective strategies. The availability of flexible lease options and low upfront costs has propelled the concept of Managed Office spaces, making them an attractive and financially advantageous choice for companies looking for workspace solutions.

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Agility and Flexibility

One of the key driving forces behind the growing demand for managed office spaces is the need for agility and flexibility in today’s business landscape. Traditional office leases often involve long-term commitments, inflexible terms, and significant upfront costs. Managed office spaces offer businesses the freedom to scale up or downsize as per their requirements, providing the agility needed to adapt to changing market conditions quickly. This flexibility appeals to startups, small businesses, and even larger enterprises seeking a more dynamic and adaptable workspace solution.

Cost-effectiveness

Compared to a traditional office arrangement, managed office spaces provide a cost-efficient alternative. Businesses no longer need to invest in buying or leasing commercial real estate, along with the associated expenses of maintenance, utilities, and infrastructure. Managed office providers handle these aspects, allowing businesses to focus their resources on core operations and growth. With transparent pricing structures and the ability to choose from various workspace options, businesses can find a solution that aligns with their budget and operational needs.

Amenities and Services

Managed office spaces go beyond offering a physical workspace. They provide a range of amenities and services designed to enhance productivity and employee well-being. These amenities can include fully furnished offices, high-speed internet connectivity, meeting rooms, communal areas, reception services, security, housekeeping, and even access to additional business support services. By providing these facilities, managed office spaces create a conducive work environment that fosters collaboration, creativity, and efficiency.

Premium Experience and Brand Image

What attracts most occupiers to managed office spaces is the allure of premium experiences and curated designs. These spaces are meticulously designed to provide a high-end and tailored environment that goes beyond the traditional office setup. They invest in creating aesthetically pleasing and functional work environments that align with the evolving preferences and expectations of modern professionals. These thoughtfully designed spaces, often equipped with state-of-the-art technology, not only enhance productivity but also contribute to a positive brand image for businesses occupying them.

The times ahead

The unstoppable growth of managed office spaces in the office segment is a testament to their ability to meet the evolving needs of businesses in a rapidly-changing world. With their agility, cost-effectiveness, amenities, community-building opportunities, and focus on creating premium experiences, managed office spaces have become a compelling choice for businesses of all sizes. As the demand for flexible work environments continues to rise, it is clear that managed office spaces will play a vital role in shaping the future of the office segment.

(By Puneet Chandra, Director & Co-founder, Skootr. Views are personal)