New York world’s most expensive flexible office location, Mumbai tops India: Workthere

April 5, 2022: Flexible office specialist, Workthere, has reported that New York is the world’s most expensive flexible office location. In India, Mumbai ranks as the most expensive flexible office location followed by NCR. Workthere is a brokerage-backed online listing platform, for flexible, co-working and managed office spaces, across geographies. Launched in 2017, Workthere is a platform, focused exclusively on flexible spaces.

Key highlights:  

• New York tops rankings as most expensive flexible office location globally 
• Berlin is one of Europe’s fastest growing flexible office markets 
• London in recovery mode despite position in the rankings 
• In India, Mumbai ranks as the most expensive flexible office location followed by NCR

*USD to INR conversion done as per rate on 5^th April, 2022 (1USD= INR75.52)*

Data as on date

India has one of the largest office markets in Asia Pacific region. The major demand drivers for office spaces have been the IT/ITeS, BFSI and consulting occupiers. The top operators in India are Awfis, WeWork, CoWrks, Smartworks and Tablespace with over 125,000 total seats. While technology occupiers continue to drive demand; flexible workspaces have gained share and took 13% of the

overall office demand of 639.9 mn sq. ft. in 2021. The emergence of India as a start-up powerhouse is also an important contributor to the demand for flexible spaces. They have managed to reinvent their offerings and reposition themselves better suited to today’s dynamic world. Time and distance are important factors indicated by most employees and hence there’s a high demand concentration in the suburban and peripheral areas of cities. Flexibility is clearly seen as a benefit for space management.

Naveen Nandwani, MD, Commercial Advisory & Transactions, Savills India and head of Workthere India said, “India has been witnessing new trends in the flexible workspaces segment. Co-working operators are constantly evolving and relooking at their strategies to gain better investment. As many companies seek a return to the office, employees prefer a hybrid work setup that creates more flexibility.”

New York and San Francisco have emerged as the most expensive flexible office markets worldwide, while Berlin is one of the fastest-growing European markets, according to Workthere. 

Private office desk spaces in New York cost an average of $961 per month, closely followed by San Francisco.   

Griffin Foley, Northeast Lead, Workthere Americas, said that the figure was mostly reflective of the fact that occupiers were gravitating to the best flexible spaces: “The flexible market is now dominated by high quality spaces because occupiers are focussed on cultivating an updated office strategy around a space employees want to be in, and in an environment that enhances their desired culture.” 

Foley added that businesses were seeking to locate in places near subway stations to make the commute more convenient and limit travel times.  

Jack Williamson, head of Workthere UK, said that as one of the most mature flexible markets globally, London was now experiencing a strong recovery. “Due to the large number of flex spaces there is a variety of pricing models and quality, meaning the rate of that perceived recovery, when only pricing is taken into account, is slightly below expectations as some operators are willing to drop prices to increase occupancy levels,” explaining London’s positioning in the rankings.  

Meanwhile, Berlin’s flexible market has limited supply with a vacancy rate of 3.5%. The growth of the flexible market is being driven by science, digital and technology sectors, keeping it buoyant during the Covid-19 pandemic, where the flex market only saw a 1.4% decrease in space during the two years of the pandemic.  

This growth is set to continue, said Workthere, as Tesla prepares to begin production of electric vehicles from its first European manufacturing plant, located near the city; there is also a plentiful supply of venture capital funding for innovative start-ups. 

 Lisbon, which is among the cheapest flex markets in the rankings – at just $329 per desk per month – was booming since conventional office space is now hard to secure. Lisbon is experiencing an overall office vacancy rate of 7%, and is now one of the most competitive European flexible markets.