'Demand for Flexible Workspace Growing Rapidly': Rahul Sarin, Skootr FinSave
How do you foresee the future of Office spaces in India?
Despite the hurdles posed by COVID-19, the future of office spaces remains bright. Office space has already witnessed strong interest from sectors such as technology, consumer durables, BPOs, banking and financial services leading to a forward-looking annual growth in office absorption. The industry observes substantial portfolio growth towards new leases as most occupiers continue to prioritise renewal and renegotiation.
Given the fluid situation due to the pandemic, corporates are determined to lease and divest their office spaces to avoid unwanted long-term commitments and capital expenditures. As per a CBRE report, India’s 36 Mn sq-ft flexible space segment is likely to rise by 10-15% (y-o-y) in the next three years. With enhanced demand for customized and private spaces, corporate occupiers are focusing their investment portfolio in Managed Office spaces.
Do you think with the rise of flexible spaces, sustainable annual growth in office absorption is seen?
With robust occupier interest, the requirement towards the flexible space segment continues to grow in 2021, as ‘core + flex’ approach is at the forefront for all office stakeholders.
As enterprises display an increased inclination towards agility/flexibility to meet real estate requirements, the need for lease flexibility, fully furnished, private/semi-private, serviced facilities with a focus on clientele will continue to rise. With flexible workspace share growing in the overall real estate pie, markets like Bangalore and Hyderabad continue to drive demand for IT sector; Delhi-NCR will see a rise in corporate and backend offices. Along with these cities, Mumbai being the hub for BFSI sector will see a growth for flex demand.
Please explain the role of Skootr FinSave. What benefits does it offer in the commercial real estate industry?
While Skootr Global has been a dominant player in the Managed Office space, the concept of ‘Skootr FinSave’ was developed after identifying the growing demand for financial services in the office segment to cater to one of the most important aspects of office industry in current times: CAPEX & Cost Optimisation. It offers fitout as a service that allows numerous benefits such as Tax Benefits, leasing office fitout offers lucrative tax benefits as payments are 100 per cent tax-deductible. No large upfront cost means capital is retained with the business, maintaining working capital that can be invested into other revenue-generating operations. Ability to offer Dry leasing (funding) & Wet Leasing and outsource asset salvage & disposal-related risk is also managed through Skootr FinSave services.
The requirement is now more driven in the form of flexible office spaces like Managed, Co-working or Serviced office spaces primarily because companies would not like to spend on the CapEx and secondly, they would want to enjoy the flexibility in these uncertain times.
How flexible office space can help in the growth of an organization?
Given the fluid situation due to COVID-19, office sector got a time-out to re-evaluate the purpose of office to serve as a communal space that can foster innovation, boost productivity, promote collaboration and enhance company culture. The traditional workplace, in the long term, will transform into a multidimensional offering focused on flex space.
Going forward, organizations will re-evaluate their strategy and focus on higher flexibility and innovative solutions models such as reverse office, fit-outs as a service, dry & wet leases and pay per use, among others. Additionally, through services such as reverse officing, enterprises save anywhere between 20% to 50% of maintenance and administration costs based on surrendered area, optimized rentals while enjoying the flexibility to scale up and take smaller portions of real estate within the same vicinity as and when required.
Long-term changes to workspace design such as the use of collaborative spaces or using hot seats will be the norm going forward. We can expect more enterprises to be seen working out of Grade A spaces. With cutting edge technology and safety of employees as top priorities of the corporates, we believe Grade A spaces will be the most preferable choice of every growth driven business in the coming years.
Do you see any structural changes in the office spaces or any specific demand on interior designs/ fit-outs in the industry?
Corporate occupiers are now re-evaluating their investment in fixed real estate assets. One of the ways of doing so is exploring flexible and cost-efficient workplace solutions while complying with today’s social and safety needs.
The major key variables observed in the new office setups are smaller, non-regimented work clusters with varied workstation typologies. The ask for the overall workstation sizes has also gone up by 20-25% to ensure safe distancing. Removable privacy screens have made a comeback specially in zone with higher interaction needs. Additionally, given the fact that people have been working from home for a long time and have found their solace in their personalized spaces, we are exploring a completely new design palette with a Resimercial touch. This new approach is making the transition for employees much easier and more secure as they return from their new normal of work from home.
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