Realty players are finding small office spaces a better bet as businesses battered by recession and entrepreneurs with capital constraints are increasingly gravitating towards them on the ground of affordability.

Small office spaces are having a lot of takers as they are affordable. We have sold 250 small units, totaling 80,000 sq ft in the last month itself, Royal Palms India Joint Managing Director, Dilawar Nensey told PTI here.

The size of these small office units range between 385 sq ft to 800 sq ft or at times 1,000 sq ft and Royal Palms sells them at Rs 2,999 per sq ft.

Demand is driven by not only large corporates looking for cheaper premises but also a large number of entrepreneurs who are constrained by availability of capital.

Large companies, after the economic meltdown, are seeking to restrict their outflow on lease rentals and looking to move to cheaper locations, Nensey said.

Another realty player, Ackruti City Ltd Chairman, Hemant Shah, cited the growing number of young entrepreneurs as another demand driver. A pick up in sales of small offices is clearly visible.

While Ackruti is primarily a player in the residential segment, it has seen an encouraging growth pick up in sales of small office space in the range of 500-1,000 sq ft, shah said.

A 385 sq ft unit would be available for as low as Rs 11.5 lakh, Nensey said. People are looking at the affordability factor now, he said, adding the company has sold small units worth Rs 43 crore since December 1, 2009.

Another trend increasingly visible is that of big companies positioning their staff closer to customers and not in corporate hubs as before.

Communications take place over telephone, voice mail, electronic pagers and other technology. The result is an increasing demand for smaller office spaces with greater flexibility and adaptability, Regus Country Head, Madhusudan Thakur, said. Nensey sees a pick up in big ticket deals as well going forward.

Royal Palms has closed some big deals with Prime Focus 60,000 sq ft, security company Tops 20,000 sq ft and Essel 50,000 sq ft, among others, Nensey said. However, the critical mass will come from the small office units, he said.