CBRE South Asia Pvt. Ltd. unveils a compelling shift in corporate real estate strategies through their latest survey. The findings highlight the surging popularity of flexible office spaces as the preferred short-term portfolio approach, with 47 percent of respondents planning to increase their utilization within the next year. An impressive 56 percent of participants expressed their intention to allocate more than 10 percent of their office portfolios to flexible spaces by 2025, emphasizing the enduring importance of adaptability in the corporate landscape.

To optimize portfolios and enhance efficiency, approximately 37 percent of respondents plan to consolidate operations in fewer locations. This trend reflects a focus on streamlining operations and maximizing resource utilization. The survey also highlights a growing interest in Tier II cities due to skilled talent pools and improving infrastructure. In Q1 2023, 13 percent of respondents relocated certain functions to Tier II cities, compared to 8 percent in December 2021.

The survey underscores India's long-term appeal to global corporations, with 75 percent of respondents expressing a positive outlook on portfolio expansion over the next two years. This resurgence mirrors pre-COVID-19 levels, where 79 percent of respondents in 2019 anticipated portfolio growth while only 6 percent expected contraction. Encouragingly, the survey reveals a heightened sense of optimism among occupiers, as the percentage of respondents foreseeing a substantial increase of over 30 percent in portfolio size rose from 12 percent in July 2022 to an impressive 28 percent in Q1 2023. Favourable demographics, a skilled and cost-effective talent pool, robust technology and startup ecosystems, the availability of high-quality office spaces, attractive rentals, and supportive government policies serve as the primary drivers for this sustained portfolio expansion by global corporations.

In the realm of remote and hybrid work environments, occupiers face the delicate task of striking a balance between flexibility and optimal space utilization. Consequently, meticulous attention is being devoted to formulating hybrid work rules and policies that effectively align business objectives with workforce requirements. 65 percent of respondents embrace the strategy of assigning fixed physical office locations to address the challenges faced by new hires in terms of onboarding, collaboration, cultural assimilation, and visibility. Furthermore, remote hiring is expected to adopt a combination of work-from-home (WFH) arrangements and satellite offices, allowing new employees to periodically visit the office, foster connections with colleagues, and gain familiarity with the company's practices and culture. This hybrid approach finds favour with 35 percent of respondents.

Enhancing the overall employee experience emerges as a critical component of return-to-office (RTO) planning. Occupiers prioritize strategies such as integrating employee well-being into workplace and workforce initiatives (74 percent of respondents), implementing organizational policy changes to foster greater flexibility (70 percent of respondents), engaging all stakeholders to redefine the purpose and design of office spaces (60 percent of respondents), and empowering people managers through coaching and upskilling to effectively lead hybrid teams (56 percent of respondents).

The survey also indicates a shift in occupiers' approach to office presence, deviating from the trends observed in 2021 and 2022, despite the prevalence of hybrid working arrangements. In Q1 2023, the majority of respondents (96 percent) preferred working in the office for at least three days per week, aligning with the findings of the July 2022 survey (91 percent). Notably, there has been a significant increase in the inclination towards fully office-based strategies, with 40 percent of respondents opting for this approach in Q1 2023, compared to only 18 percent in July 2022. 73 percent of respondents indicated that occupiers are expected to limit hybrid working to a portion of their workforce, specifying that less than half of their staff would have the option. Among the respondents, around 30 percent stated that hybrid working would be available to 25–50 percent of their employees.