Since 47% of corporates plan to utilize flexible office space more over the next 12 months, it has become clear that this is the best short-term real estate portfolio strategy.

According to a poll by real estate consultancy CBRE, almost 56% of respondents want more than 10% of the office portfolio as flexible spaces by 2025.

According to the poll, tier-II cities are becoming more popular due to their talented personnel pools and developing infrastructure. In Q1 2023, 13% of respondents decided to move certain services to tier-II cities, up from 8% in December 2021.

“Despite the challenges posed by macroeconomic and geopolitical factors, the Indian office sector has shown resilience. Looking ahead to 2023, we anticipate these challenges will persist, necessitating adaptability and strategic foresight,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.

In the medium to long term, India will continue to be attractive to multinational corporations. In Q1 2023, 75% of respondents predicted that the size of their portfolios would expand over the next two years, indicating that occupants’ prognosis for long-term portfolio expansion remained favorable.

“In terms of office portfolios, our Q1 2023 survey reveals that occupiers will continue to expand into flexible office spaces. 87% of respondents expect to either maintain or increase the percentage of flexible spaces in their portfolios over the next two years. We anticipate a significant occupier interest in allocating over 10% of their office portfolios to flexible spaces over the next two years,” Magazine said.

Compared to pre-COVID-19 levels, when 79% of respondents in 2019 indicated portfolio growth and just 6% indicated portfolio shrinkage, this benchmark for expansion reached those levels. According to the study, the number of respondents who anticipated a considerable rise (>30%) in portfolio size increased from 12% in July 2022 to 28% in Q1 2023, indicating that occupiers are now more optimistic about growth.

The poll found that to make the most use of their space, occupiers will seek a balance between promoting flexibility and guaranteeing consistent occupancies when return-to-office plans are scaled up in a hybrid environment.

Occupiers are inclined to place recruits in a permanent physical office space to solve the difficulties they have with onboarding, teamwork, cultural integration, and visibility. 65% of the respondents agreed with this strategy.

“The increased focus on Return-to-Office (RTO) plans by occupiers, driven by factors such as work-from-home (WFH) fatigue, attrition, and moonlighting, has resulted in a gradual upswing in office occupancies since the second half of 2022, majorly across sectors including BFSI, engineering & manufacturing, life sciences, e-commerce, media & marketing. Our latest survey findings point out that nearly one-third of the respondents reported a utilization rate of more than 75%,” said Ram Chand…

Work-from-home (WFH) and satellite offices are projected to be the main emphasis of remote recruiting, allowing new hires to visit the office on occasion to meet with coworkers and get to know the company’s procedures and culture. 35% of the respondents preferred this mixed strategy.

Including employee well-being in workplace and workforce strategies (74% of respondents), allowing for more flexibility through organizational policy changes (70% of respondents), involving all stakeholders in redefining office goals and layouts (60% of respondents), and preparing people managers for leading hybrid teams (56% of respondents) are among the strategies that occupiers place a high priority on.