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The absorption rates of office spaces have received a significant rise due to a dramatic startup boom in the country. A healthy financial boost and entrepreneurship synchronization in the country are the key reasons behind the flourishing of the startup ecosystem. If the statistics are to be believed, it has been found that startups appropriated 30% of gross office leasing space in 2022 and these figures are predicted to grow further in 2023. 

To further support the startup ecosystem in the country, the Government of India has taken many pro-startup initiatives including Aatmanirbhar Bharat App Innovation Challenge, Startup India Initiative, and Startup Seed Fund. All these orientations by the government promise a halcyon period ahead for startups in the country. India has been categorically affirmed as the third-largest startup ecosystem in the world, with 82,000 startup organizations. Considering the current statistics, startups are projected to consume the largest office space in India. Post-pandemic, when the restrictions started lifting, the commercial real estate sector received a quick recovery due to rising demand by startup organizations. Startups are found to prominently invest in shop-cum office spaces, organic office spaces, mixed-use projects, and IT/ITes. 

Further, commercial real estate is witnessing a rise in the trend of adoption of flex office spaces. Experts are predicting that by 2030 almost 30% of commercial real estate will be flex office spaces. The startup ecosystem has aligned itself with this trend. In today’s ever-evolving business landscape, startups have learned to survive with fewer resources & time and adapted themselves to new business conditions. Many of these startups have done it by leveraging the advantages offered by flex workspace. 

In commercial real estate, flex space offers a short-term lease option and includes common business needs i.e., offices, retail space, and warehouses. While traditional office commercial leases ask businesses to sign in physically and financially for the long term, flex offices offer short-term leasing options from three to six months. Flex space offers businesses a more tailored approach to office space that suits their needs, time frames, and resources.


Why should startups consider flex spaces? Let us find out – 

  • Flexibility – For businesses that are in their initial stage of growth long-term leases might prove to be restrictive which forces them to plan the scope of growth and loss beforehand. If the startup faces any unprecedented severe financial loss, a traditional lease would add more pressure to the limited financial resources of the company, draining it of a good amount of money every month. Flex space, on the other hand, offers flexible time frames for startups to adjust according to economic factors and their business performance. 
  • Employee retention & satisfaction – When compared to businesses in their advanced stage of growth, startups receive more employee turnover. The employee departure rate in the startup industry is higher. This makes it important for startups to retain their current employees to save additional expenses of sourcing and training new talent. 

According to the findings of research by HSBC, nine out of 10 employees claim that being able to work in a flexible mode, be it hybrid or remote, impacts their productivity positively. By incorporating a flex space in their strategy, startups can get equipped to accommodate hybrid working arrangements and improve the performance and productivity of their employees. 


Choosing the right flex space can be a challenge, but fret not, we are here with some tips- 

                    Commercial real estate offers a plentiful of options for you to choose from, but remember not all listings are the same. If you are in the real estate market looking for suitable office space, beware of websites that claim to offer ‘flexible’ commercial leasing options because in most cases they just offer false claims. Read reviews of other small business owners to get a clear picture of the property. 

Also, understand that every startup is unique and has a different set of workspace requirements. Ask yourself these questions prior to starting your search for the flex space – 

  • How many employees are you planning to invite to the office for work in a day?
  • Will you require extra space for visitors including clients and other business guests? 
  • Will your business demand extra retail space in addition to the workspace?
  • What amenities will you need to ensure the smooth conduction of work?
  • Will you have to pay any third-party fees?
  • Will you be in direct contact with the landlord? 

As the startup ecosystem has fueled up, the demand for flex workspaces has risen. Flex space is a perfect match for startups because it aligns well with fluctuating time frame needs of startups. Though flex space benefit companies of all sizes and industries, for startups it is a lucrative solution that saves them resources, increase employee productivity, and prepares them for survival in turbulent times.

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