Office Real Estate Grows for Co-Working Space from 6% in 2021 to 20% in H1 of 2022

The real estate industry is a growing field all around the world. Commercial real estate investment has always been the safest choice for buyers to get high returns. Gradually, office real estate grows and brings benefits in the long term. 

At the present time, the need for office spaces, especially the co-working space in the industry, is in ever-increasing demand. The shift from 6% demand in 2021 to 22% in the first half is proof of that. India’s commercial real estate growth is expected to rise in the coming years, with more businesses being started in the country.

Here is an explained piece on the co-working trends in the Indian real estate industry and the high surge in spaces’ shares in the market.

The Trend of Co-working Real Estate Industry

Co-working is a new trend gradually making its strong foot in the commercial real estate market in India and worldwide. This model of office spaces is also known as on-demand working spaces, shared office spaces, and many more. The concept of co-working is getting famous because of the spiralling commercial real estate investment in India. Companies not wishing to tie themselves down for a long-term lease or purchase are most likely to opt for co-working spaces. The co-working will surely be the future of real estate in India. The flexibility to move and cost structures enhances its growth. The future of real estate in India will be the fusion of old office spaces and new co-working spaces. 

Office Real Estate Grows to 20% in the First Half of 2022 from 6% in H1 of 2021

The demand for flexible working spaces has reached a new high in India in the post-pandemic period. Start-ups and big companies are also opting to co-working commercial real estate in India in 2022. As per the latest reports of ANAROCK, a real estate service company, the shares of co-working in the real estate industry stood at 20% in the approximate net absorption of 20.8 million square feet in the top 7 cities in India in the first half of 2022. But the same share stood at 6% in the year 2021, with approximate net absorption of 9.22 million square feet.

Contrary to that, the IT sector, one of the biggest reasons behind commercial real estate growth in India, declined from 36% in the first half (H1) of 2022 to 49% in the first half of 2021. This change in commercial real estate in India 2022 is that these companies are now opting for flexible working spaces.  

see also – Commercial Real Estate Market India

When calculating the net absorption for H1 of 2022, both cities, Hyderabad and Bengaluru, remained on the top of the list regarding co-working space demands which equals 50%. The office estate grows in these top 7 cities of India at an exponential speed after COVID-19. 

The co-working space’s flexibility makes it a great commercial real estate investment choice for businesses. They can simply plug and play instead of going through the burden of investment in the commercial real estate market in India and focusing on its interiors along with other needs. All these demands collectively boost the demand for co-working spaces in India and other countries. 

The below-tabulated data shows the approximate net absorption taken in different cities in H1 of 2022 and the co-working spaces shares in it.

Bottom Line

The commercial real estate market in India will continue to grow in the coming years. The post-pandemic will be the major driving force behind the reason for office real estate’s growth. The future of real estate in India is bright and will bring high investment returns for venture capitalists.