As majority of the businesses are back to the office on a hybrid basis, office portfolio is in expansion mode , with non-metro cities emerging as major demand drivers.
Hybrid working continues to be the most preferred workspace strategy, with 63% of the firms currently embracing the same, as per a survey of large, mid-sized and small firms conducted by Colliers. Firms from the Consulting, BFSI, and engineering sectors are at the forefront of adopting hybrid working.
Hybrid Working Share
Three days a week in the office is the most popular hybrid working style for India Inc, with 26% of the firms preferring the same. The survey indicated that this hybrid pattern allows businesses to pursue business goals without hindrances while offering better work-life balance to employees.
63% of the firms are currently embracing a hybrid model with a varying number of days in the office, while 28% work all days from the office 38% of the organizations are looking to lease new office spaces in the next 6-18 months, while another 35% would like to retain their existing portfolios Half of the organizations who are planning portfolio expansion in the next 6-18 months belong to the Technology sector About 53% of the firms feel that productivity has increased since remote work started
About 28% of the firms feel that discrepancy in a workplace environment is the biggest challenge in Hybrid working, followed by communication barriers and lack of collaboration. Among various regions in Hyderabad, Central Hyderabad has witnessed the highest rise in prices, with an impressive 55 percent YoY increase.
Non-Metros Drive Corporate Real Estate Expansion
About 38% of the organizations indicated that they are planning portfolio expansion in the next 6-18 months, by leasing traditional as well as flex spaces. A majority of the businesses implement hybrid working in varying degrees, 35% highlighted that they would like to retain their existing portfolios, while 13% look to consolidate their office spaces.
The tier II story is back in the market. Especially, large firms, are leading this trend as almost 70% of the large enterprises are open to exploring flex in non-metro cities, while only 27% of the smaller firms are considering the same. About half of the firms whch are planning office expansion in the next 6-18 months are from the technology sector, followed by BFSI. This is led by the massive growth these two sectors are seeing over the last two years. Interestingly, about one-third of the occupiers surveyed revealed that their productivity increased by 5-10% with hybrid working. Offices are now evolving into centers of collaboration and innovation, with the wellbeing of employees at the core. A hybrid work style needs to be supported by apt technological intervention to ensure seamless collaboration and communication, according to Ramesh Nair, Chief Executive Officer | India and Managing Director, Market Development , Asia, Colliers.
About 35% of the firms are willing to set up flex office spaces in non-metro cities to cater to changing employee needs. Employee convenience and higher occupancy costs in metro cities are prompting occupiers to consider non-metro cities. Since last year, flex spaces have been seeing a surge in enquiries from firms for office space in non-metro cities.
Consulting, BFSI and Technology companies are keen on setting up offices in non-metro cities. Overall, the interest levels towards building offices in non-metro cities will help reduce the infrastructure load on metro cities, and at the same time help build a cohesive business ecosystem in the smaller cities, leading to more equitable growth, according to Vimal Nadar, Senior Director and Head of Research, Colliers India.