According to a research by Colliers International India, in Mumbai gross leasing in the Quarter 3 of the year was 1.8 lakh sqm, of which 36 per cent was by flexible workspace.
The need for workspace efficiency and collaborative work environment has increased demand for co-working space. Its increasing demand has made it lead the office space leasing business.
According to a research by Colliers International India, in Mumbai gross leasing in the Quarter 3 of the year was 1.8 lakh sqm, of which 36 per cent was by flexible workspace. This quarter, compared to the last, also saw 11 per cent increase in absorption. This was mostly concentrated in the Andheri East (25 per cent), Navi Mumbai (18 per cent), LBS/Eastern Suburbs (15 per cent) and Goregaon/JVLR (12 per cent) micro markets.
The report states, "For the second consecutive quarter, flexible workspace operators drove leasing activity in Mumbai accounting for nearly 36 per cent of gross absorption in Q3 2018, followed by BFSI occupiers representing 28 per cent and consulting occupiers accounting for 15 per cent. Approximately 9.0 million sq ft of new supply is scheduled to appear during 2019-2021."
Talking about the growing influence of the co-working spaces, the report mentions that, in Q3 2018, three of the top five deals were recorded by flexible workspace operators. These deals were in the micro markets of Andheri East, Navi Mumbai and Goregaon/JVLR. Among notable transactions, WeWork expanded at multiple locations with leases ranging from 90,000 sq feet (8,360 sq metre) to 214,000 sq feet (19,890 sq metre).
The report further emphasizes, that, despite significant gross absorption, overall rental values in the city remained stable due to ample availability in existing Grade B developments.
"We expect overall city rents to strengthen by 1.5 per cent YOY (year over year) over 2018-2021, especially in the preferred micro markets of Andheri East, Lower Parel, BKC and Thane owing to consistent leasing amidst the limited availability in Grade A developments," says the report.
About the new DP 2034 and its impact, the report says, it should increase the floor space index (FSI) and unlock additional land in the city and peripheral areas. The DP 2034 should include aspects of linking permissible FSI to the road width and extending the use of permissible FSI which was earlier permitted only in suburbs to the island city. If permitted, this should restrict the height of residential and commercial towers on narrow roads, thus reducing pressure on the existing infrastructure.
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