New Delhi: Flexible workspace providers have hiked rents by up to 15% due to increased business demand and a spike in commodity prices that have led to higher fit-up costs, declared several operators to ET.

Most operators report over 90% occupancy, with no space available for immediate rental.

“With a surge in demand and a limited amount of Grade A office space available in metros, quality workspaces command a higher premium,” said Nidhi Marwah, Group Managing Director, The Executive Center. “We have reflected the increase in rents and fixed expenses ranging from 1 to 5% in our costs. However, other factors or conditions of sale determine the final costs.

The past few years have been a catalyst for large companies to re-evaluate their priorities regarding workspace needs; flexibility and employee well-being have become priorities, and these conveniences come at a price.

“The cost of everything has gone up over the last few months and in line with market prices, we have increased rentals by up to 15%,” said Akshita Gupta, co-founder and CEO of ABL Workspaces, which recently raised funds. from Canada-based Ethik Inc in a Series A funding round. “We believe the market will absorb the costs as companies focus on flexibility and employee well-being.”

Several companies, including multinationals, adopted the concept of managed space after the Covid-19 pandemic.

“We haven’t seen any drastic price increases so far; however, our costs have certainly increased due to multiple factors such as inflation, operational costs, rising raw material costs, etc. “said Manas Mehrotra, founder, 315Work Avenue, which has raised rents between 5% and 10%.

“There is a direct correlation between pricing and market conditions and we believe this will affect pricing soon due to the increased demand for coworking spaces in the recent scenario,” he said.

Level A coworking and flexible office operators are seeing occupancy levels between 80% and 95% at their centres, experts say.

“Clients are demanding more flexibility in the length of agreements, and as a result, lock-in terms have been reduced to between 6 and 12 months. This has resulted in a 10-15% increase in seat closing costs over the last quarter,” said Shweta Sawhney, Managing Director, Delhi-NCR, Savills India.

A few other factors determine workspace pricing, such as location, design, contract length, amenities, and more. Growth in office leasing indicates that market fundamentals are strong and demand for coworking will remain robust due to the implementation of back-to-work policies, healthy hiring prospects for businesses and plans to expansion for many companies.

However, some operators have not increased rents.