April 3, 2023
2 mins read

Layoffs impact office space demand in India

Bengaluru and Delhi-NCR were the most preferred locations for top flex operators for their portfolio expansion….reports Asian Lite News

Global economic slowdown, tech layoffs and hybrid work have impacted gross leasing of office space in India, as flexible office space providers share reached almost at par with traditional tech companies in the first quarter of 2023, a report has shown.

Leasing by flex space operators in Q1 2023 inched closer to that of technology companies for the first time ever, according to the report by Colliers India.

Flex space occupiers leased 2.1 million square feet of space, accounting for 20 per cent, a little behind the technology sector’s share at 22 per cent.

Together, both the sectors accounted for nearly 42 per cent of the total leasing across top six cities.

“Share of technology sector has declined steadily from 34 per cent in Q1 2022 to 22 per cent in Q1 2023, as corporates continue to focus on building in operational efficiencies through a hybrid model,” said Peush Jain, Managing Director, Office services, India, Colliers.

While Hybrid working has impacted demand for conventional office spaces, it has also fuelled demand for flex spaces across top markets.

“As long-term growth drivers for the tech sector remain strong in India, the technology sector will continue to drive office leasing activity through a mix of conventional and flex spaces,” Jain added.

Bengaluru and Delhi-NCR were the most preferred locations for top flex operators for their portfolio expansion.

Bengaluru accounted for nearly half of the total flex leasing during the quarter, followed by Delhi-NCR at 30 per cent share.

Occupiers’ interest in flex spaces remain unabated as they continue to blend their conventional real estate portfolio in a bid to control costs while providing convenient ways to work for their employees.

Large technology occupiers have also been leasing spaces in flex spaces due to their added benefits such as flexible lease terms, lower capex and modern workplace designs, said the report.

This coupled with ongoing recessionary conditions and layoffs in the technology sector has led to a relative pushback in conventional leasing by these occupiers.

The year 2023 has begun on a cautious note registering a 19 per cent YoY decline in leasing activity across top 6 cities at 10.1 million square feet during the first quarter.

“Although office absorption is currently facing temporary downward pressures, leasing activity will likely pick up especially towards the latter part of the year, driven by strong growth fundamentals,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

ALSO READ: Procurement through GeM crosses Rs 2 lakh cr

Previous Story

Longeval Networks explores plans of expansion

Next Story

Meet lone Indian woman entrepreneur at Forbes Summit

Latest from Business

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and

India to Empower Global South

India is emerging as a pivotal force in the global transition to clean energy, with Union Minister for New and Renewable Energy, Pralhad Joshi, asserting that the country is empowering the Global

Maruti’s Global Push Breaks Record

June shipments hit 37,842 units, signalling robust global demand Maruti Suzuki India recorded its highest-ever monthly exports in June, shipping 37,842 units and marking a new milestone that highlights the company’s expanding

India Bats for Fairer Global Finance: FM Sitharaman

FM Sitharaman stated that we believe that optimal regulation fosters innovation and stability….reports Asian Lite News India supports reforms to the international financial architecture to enhance inclusivity and equity, including Multilateral Development
Go toTop

Don't Miss

Microsoft Cuts Deep

The fresh job cuts come less than two months after