Over the last few years, flexible workspace segment has gained momentum in India and presently it is garnering 18% of the total office leasing activity.
Considering the changing demographic profile of the workforce, there has been a major change in the workspace strategies as well. As younger population joins the workforce, firms are adopting new approaches to retain talent, boost efficiency and productivity. For CRE organisations, creating an employee- friendly environment has become the primary objective in 2020.
Along with innovation, the segment will also see a significant shift in the market dynamics as consolidation takes place. Owing to huge demand potential, the sector has been witnessing heightened level of interest from VC firms over the last few years. However, the recent incidents in the coworking space, have prompted investors to take a judicious approach to ensure long term sustainability. Although, there has not been any impact on demand, but investors are cautious and are keen proactively evaluate the fundamental economics to ensure sustainability. There has been some amount of consolidation already in 2019 and the trend will continue in 2020 as larger flexible workspace operators with strong business values, financial discipline and operational transparency go on to acquire smaller players. As the market evolves further in 2020, we expect both innovation and consolidation to be major trends in flexible office segment.
