According to an industry report, the demand for flexible workspace driven by corporate entities has led to an impressive increase in enterprise leases of co-working facilities, reaching 103,665 seats in FY23, a substantial rise from the previous year’s 87,345 seats. This surge in leasing activity marks a remarkable 20% year-on-year growth, doubling the growth rate compared to FY21, as revealed by Cushman & Wakefield’s data.

The study highlights the tech cities of Bengaluru, Hyderabad, and Pune as the primary contributors, accounting for a significant 78% share of the flexible seat leases in FY23.

To cater to the rising demand, prominent companies like Smartworks, WeWork, Awfis, Skootr, Urban Vault, Vatika Business Centre, and The Executive Centre are actively expanding their operations.

“The growth of the flex space industry has been paved by the post-pandemic transformation in occupier demand and changing workplace dynamics,” stated Ramita Arora, Managing Director-Bengaluru and Head-Flex India at Cushman & Wakefield.

The report also indicates a substantial increase in the share of space leased by flexible workspace providers, rising from 9% in FY20 to 14% in FY23. Furthermore, the uptake of operator space in the flex sector experienced remarkable growth of 57% compared to FY20 and 76% compared to FY22 in FY23.

Over the past five years, the flexible workspace industry has witnessed exponential growth, expanding five-fold with an impressive compound annual growth rate (CAGR) of 41%.

“The numbers strongly indicate the market’s direction, reflecting significant momentum and confidence in flex spaces as they have become a way of life. The demand for flex is soaring given the shift in preference of both occupiers and employees,” said Harsh Binani, Co-founder of Smartworks.

In a recent development, Smartworks has expanded its operations, securing 530,000 sq ft of office space in Noida and Gurgaon, thus surpassing a regional portfolio of 1 million sq ft.

“Favorable office spaces offer a more cost-effective alternative as businesses can rent only the space they need for a specific period, avoiding hefty upfront costs and long-term commitments,” explained Ankit Jain, Co-founder & Director of Skootr.

During Q3 2022, there was a noticeable trend of companies returning to the office across various sectors, actively seeking workspaces to enhance their office experience.

Skootr, a leading workspace provider, witnessed a ten-fold increase in 2023 compared to the previous year.

“More and more companies are realizing the benefits of managed office spaces that can be customized to their specific needs and provide value-added services,” stated Vineet Taing, Chief Executive Officer of Vatika Business Centre.

Bengaluru-based startup Urban Vault has announced plans for expansion to meet the growing market demand, aiming to add over 7,000 seats in the fiscal year 2023-24.

In the pre-pandemic era, the flexible workspace sector held an average share of below 10% in annual leasing. However, tech cities like Bengaluru, Hyderabad, and Pune consistently maintained the highest share in flex operator leasing across India. Their combined share increased from 49% in FY20 to an average of 60% during the post-pandemic period (FY22 and FY23).

“Flexible workspaces in India have experienced a surge in demand from large corporations over the last few years, with metro cities witnessing the fastest-growing markets. Companies have embraced flexible and agile workspace environments as a key real estate strategy to navigate uncertain times, leading to phenomenal growth in the industry,” explained Manish Khedia, Regional Managing Director for South India and Sri Lanka at The Executive Centre.

In Q1 of 2023, The Executive Centre has already secured agreements for six new centers in key cities such as Bengaluru, Hyderabad, Gurgaon, New Delhi, and Mumbai. This expansion has added over 200,000 sq ft to their existing portfolio, further catering to the rising demand.

During FY21-23, occupiers from the IT-BPM sector consistently contributed a significant 40% share in enterprise deals, reflecting a similar trend observed in conventional commercial office leasing.

The flexible workspace sector’s remarkable growth and increased corporate adoption highlight its advantages in providing flexible, customized spaces with value-added services. With the market’s direction pointing towards a continued surge in demand, the industry is set to redefine the future of workspaces in India.

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HYDERABAD: The enforcement vigilance and disaster management (EVDM) wing of the Greater Hyderabad Municipal Corporation (GHMC) recently made it compulsory for all commercial establishments to obtain fire mitigation certificates. However, due to a lack of awareness about this new requirement, owners have displayed a poor response to comply with the regulation.

The introduction of fire mitigation certificates follows a series of fire incidents, notably at the Swapnalok Complex and Deccan Knitwear, which resulted in the loss of nine lives this year. The absence of a comprehensive fire safety policy for buildings under 15 meters in height has also contributed to the need for such measures.

In response to a query raised by the Bagh Amberpet corporator, the EVDM department stated that the recurrent fire accidents could be attributed to the presence of “red category buildings” in densely populated residential areas, owners’ negligence in implementing fire mitigation measures, outdated electrical installations, violations of occupancy regulations, commercial use of cellars, and malfunctioning fire safety systems.

To facilitate the acquisition of fire safety mitigation certificates, the EVDM department has launched a dedicated website, firesafety.ghmc.gov.in, where citizens can apply for the certificates.

To be eligible for these certificates, establishments must have fire safety installations in accordance with the guidelines outlined in the National Building Code, 2016.

Additionally, buildings with a minimum height of nine meters or more and a floor area exceeding 500 square meters, as well as “incidental assembly” structures such as function halls with a floor area over 300 square meters, must provide an external staircase with a width of 1.5 meters.

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In a significant development, the municipal corporation of Prayagraj has expanded its jurisdiction by adding 20 new localities as wards. These newly added wards have also participated in the first phase of the urban local body elections, and they will soon be recognized as taxpayers in the records of the Prayagraj Municipal Corporation (PMC).

Previously, Prayagraj had 80 wards within its municipal limits. However, following instructions from the state government, a fresh survey was conducted last year, resulting in the inclusion of 20 additional wards in the municipal corporation. This brings the total number of wards to 100. The PMC is now making preparations to include the houses within these newly formed wards in the list of properties subject to house tax payment as per the established norms.

Preliminary estimates suggest that there are approximately 20,000 houses in the expanded area of the city that will be liable to pay house tax from the current financial year. Houses and commercial areas in villages also fall under the purview of house tax, provided they have access to roads, drainage systems, and street lights.

PMC officials have deployed a team of surveyors to conduct a comprehensive survey of the houses in the new wards located in Jhunsi, Naini, Phaphamau, Bamhrauli, and Jhalwa areas, which were included in the city several months ago. So far, around 35,000 houses have been surveyed by the authorities. Both the extended wards and the villages contain houses equipped with roads, drains, and street lights, which will be included in the collection of house tax.

“The initial survey was deemed unsatisfactory as it did not meet the required standards. Therefore, it has been decided to conduct a GIS-based survey for these areas, similar to what has been done for the rest of the city, to ensure greater accuracy. Once this survey is completed, the assessment of the houses in these newly added wards will be carried out, and the house tax will be determined following the established procedure and norms,” explained DK Dwivedi, the chief tax officer of PMC.

According to the prescribed norms, a report based on the survey will be prepared, and building owners falling under the house tax ambit will be notified. Subsequently, building owners will have the opportunity to raise objections. Once the objections have been heard and resolved, the final house tax bill will be issued.

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On May 13, as the votes are counted in the Karnataka assembly election 2023, the future ruling party or coalition for the state’s next five years will be determined. Whether it’s the Bharatiya Janata Party (BJP) or the Congress that assumes power, the legislators in the upcoming assembly will have to address crucial real estate issues.

Both major political parties, the BJP and the Congress, have made promises to tackle the challenges faced by homebuyers and tenants in the state, particularly in Bengaluru, if they come to power. They have pledged to amend the controversial Karnataka Apartment Ownership Act, 1972, in order to safeguard the rights of homebuyers.

The BJP’s commitment includes the establishment of a Karnataka Residents’ Welfare Consultative Committee to enhance the “ease of living” for homebuyers. This committee will review the Karnataka Apartment Ownership Act and propose further amendments. On the other hand, the Congress party has vowed to streamline the process of transferring land titles to homebuyers. However, the Janata Dal (Secular) has not made any promises regarding the real estate sector in the state.

Experts and residents of Bengaluru anticipate policy changes once the new government takes office. These changes are expected to address issues such as empowering regulatory bodies and regularizing unplanned development in the city.

One pressing matter is the need to streamline the functioning of the Karnataka Real Estate Regulatory Authority (KRERA). Despite its establishment in May 2017 to protect homebuyers and regulate the sector, inefficiencies persist, causing challenges for those who have invested in residential properties. One such challenge is the difficulty in obtaining refunds from builders who fail to deliver apartments on time. Although the regulator can issue a revenue recovery certificate (RRC) to initiate compensation or refunds for homebuyers, the process is often protracted.

According to Sudhakar Laxman, an investor in Bengaluru, the first notice to the developer was sent in 2022, a year after the RRC order was passed in 2021. Frustrated with the delays, Laxman and other homebuyers are planning to move the Karnataka High Court to expedite the refund process. As of June last year, only 12 percent of the RRC orders passed in the state resulted in successful recovery, according to a document reviewed by Moneycontrol.

Advocates suggest that policymakers should empower the KRERA by granting it additional powers and establishing a time limit for the process. They cite examples of other states like Uttar Pradesh, Maharashtra, and Bihar, where special powers have been granted to seize and auction assets of non-compliant builders. By implementing a standard operating procedure, the KRERA could have powers similar to those of civil procedure codes, allowing it to summon individuals, call witnesses, and issue arrest warrants. Advocates argue that these measures could expedite money recovery by at least 60 percent.

Another issue that requires attention is the removal of partial occupancy certificates from the Karnataka RERA rules, aligning them with the central Real Estate (Regulation and Development) Act of 2016. Presently, homebuyers cannot claim compensation for delays in residential projects that have obtained partial occupancy certificates. Dhananjaya Padmanabhachar, president of the Karnataka Home Buyers Forum, believes that removing these certificates would provide greater clarity and protection for homebuyers.

Additionally, the registration process for resident welfare associations (RWA) in Karnataka needs standardization. Currently, there are two separate laws for the registration of RWAs, creating a need for updates and harmonization. According to the RERA Act, once a development is completed, the builder must transfer the undivided share in the project to the RWA registered under the respective state’s laws. In Karnataka, RWAs are registered under the Karnataka Cooperative Societies Act, 1959, and the Karnataka Apartment Ownership Act, 1972. However, the state government has not yet notified the rules for the competent authority.

Legal experts argue that a significant policy change is necessary to standardize the bylaws and notify the Karnataka Apartment Ownership Act, 1972, for its competent authority. They also highlight the outdated nature of the Karnataka Cooperative Societies Act, 1959, and the need for revisions to address issues such as enabling online RWA polls. Although the state government introduced standard operating procedures for e-voting during the pandemic, these measures were temporary. Advocates believe that permanent solutions are required to modernize the registration process and ensure smooth functioning of RWAs.

Not only homebuyers but also tenants are seeking resolution to their problems from the newly elected MLAs. One prominent issue faced by tenants is the sudden increase in rents and exorbitant demands for security deposits. The current situation has worsened due to reverse migration and a significant gap between rental housing demand and supply. Prospective tenants are also subjected to scrutiny of their academic and professional records, with stringent criteria set by landlords, such as a minimum of 90 percent marks in class 12 or a robust LinkedIn profile.

Advocates point out that the state lacks policies to protect tenants and prevent arbitrary rental increases. Karnataka has yet to incorporate the Model Tenancy Act (MTA), which aims to regulate tenancy terms and conditions and bring transparency to the rental market. The MTA establishes Rent Authorities and Rent Courts to address grievances and resolve disputes. However, land and urban development fall under the purview of state subjects, and only a few states such as Andhra Pradesh, Tamil Nadu, Uttar Pradesh, and Assam have revised their tenancy laws in line with the MTA.

Amith Amarnath, an advocate, emphasizes the importance of notifying the Model Tenancy Act to regulate the rental market, particularly in Bengaluru. He highlights that the act caps rental deposits, thus protecting tenants and preventing sudden rental hikes. The Rent Authority established by the act would address disputes without burdening the civil courts.

As the election results unfold, homebuyers and tenants eagerly anticipate the new government’s initiatives to address these real estate issues. Streamlining the functioning of KRERA, standardizing association registrations, and incorporating the Model Tenancy Act are crucial steps toward ensuring the rights and protection of homebuyers and tenants in Karnataka.

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The housing shortage in Germany has reached its highest level in 20 years, with around 700,000 new residences needed to alleviate the pressure on the real estate market. The shortage is attributed to several factors, including increasing construction costs, high-interest rates, and an influx of refugees.

Experts warn that construction investments are less attractive in many areas, and the sharp increases in construction prices and interest rates in recent months have negatively impacted many construction projects, exacerbating the housing shortage.

In addition to these factors, the arrival of Ukrainians to Germany following the start of the Moscow-Kyiv war on Feb. 24, 2022, has added to the demand for housing units, straining the already tight housing market with an additional 200,000 housing units needed. In response, the German government is working to address the housing shortage by implementing policies to increase the supply of affordable housing and limit rent increases.

However, the crisis persists, and in Berlin, the state government held a referendum to expropriate thousands of houses from real estate companies due to protests against rent increases. The majority of voters (56.4 percent) supported the expropriation of over 240,000 apartments, as the companies own more than 550,000 residences worth €100 billion in Germany, where half of the population lives on rent.

The average rents in Berlin have increased by over 100 percent since 2010, with new apartments being rented for at least €26 per square-meter. The rising rental prices have made it difficult for many families to find affordable housing, forcing them to live in cramped conditions or in areas with limited access to essential services.

It is clear that more needs to be done to address the root causes of the problem, such as rising construction costs and interest rates. Unless significant action is taken, the housing shortage in Germany is likely to persist, causing continued economic and social problems for families and communities.

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