A new report from Savills India has found that leasing from coworking operators is expected to drop 58% year-on-year due to corporate demand for flexible space falling.
The report revealed that leasing will tumble to 3.4 million square feet across six of India’s major cities of Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai and Pune, compared to 8.1 million square feet last year.
Despite this huge drop in leasing activity, Savills still expects numbers to slowly grow over the next two years as the industry begins to recover from the ongoing pandemic.
In fact, coworking takeup is expected to rebound around 15% in 2021, which is similar to 2019 numbers, and 25% in 2022.
“Over the years, shared office space has emerged as a separate asset class, bringing significant cost-advantages to occupiers,” said Arvind Nandan, research and consulting at Savills India MD. “However, we believe that flexible workspaces will reinvent and reposition themselves, emerging stronger on the other side of the pandemic.”