Pune is set to reach an impressive milestone, with flex space projected to account for 10% of the city's total office area by 2025. According to a report by Colliers, the thriving technology sector and the adoption of hybrid work models have fuelled this growth. In 2023, Pune's flex space stock stands at 5.4 million square feet, marking a four-fold increase since 2018. This robust growth positions Pune ahead of other top Indian cities in flex space penetration, indicating a transformative shift in the city's work environment.
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In a significant development, Pune's flex space stock is poised to cross 8 million square feet by 2025, constituting 10% of the city's total office area. This forecast comes from Colliers' newest report, ‘Pune – Tech-tonic shift to flex’, which highlights the city's rapid flex space expansion driven by technology, mainstream sectors, and healthy investment trends.
Over the past five years, Pune’s flex space market has experienced remarkable growth. With a young, dynamic population and the establishment of large technology corporations and numerous start-ups, the city has become a hub for flex spaces. The pandemic has accelerated this trend, adapting to hybrid work models and leading to a four-fold increase in flex space since 2018, reaching 5.4 million square feet as of June 2023.
This growth represents 8.3% of Pune's total Grade A office space, surpassing all other top six cities in India. While Bengaluru continues to dominate the Pan India flex space market in terms of size, Pune has outpaced it in terms of penetration at 8.3%.
Flex spaces, offering models like Flex + Core and Hybrid working, have played a crucial role in reshaping the workspace. Nationally, the share of flex space in occupiers' portfolios has grown from 5-8% in 2019 to 10-12% in 2023.
Responding to this growing demand, leading operators in Pune have rapidly expanded their offerings. In 2022, they leased 1.77 million square feet, or 35% of the city's total leasing. The first half of 2023 has already seen a robust 0.57 million square feet leased, making up 22% of total leasing. This has led to a significant growth in flex space stock, multiplying four times since 2018.
The Technology sector, having adopted the Hybrid work model, has become the leading occupier of flex space, constituting 43% of total seat uptake between 2020 and H1 2023. Engineering & Manufacturing followed at 27%. With hybrid working expected to persist, the technology sector will continue to drive flex space demand in Pune.
Areas like Baner-Balewadi, CBD, Kalyani Nagar, Mundhwa, and Yerwada have emerged as hotspots for flex space. Future growth is expected in regions like Viman Nagar and Kharadi, spurred by a robust supply pipeline and upcoming metro connectivity.
In conclusion, Pune's vigorous flex space growth is a testament to its position as a hub for innovation and modern work practices. With strong investment and demand, particularly from the technology sector, Pune is setting trends in the workplace, making flex spaces an integral part of the city's office landscape. The upcoming years are expected to witness further expansion, solidifying Pune's leadership in this sector.
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