According to CBRE South Asia, flexible workspaces are gaining momentum in India as more companies adopt hybrid work models. Significant growth is expected in the coming years.

India Inc. is rapidly embracing flexibility, driving demand for flexible workspaces. A recent report by CBRE South Asia, a real estate consulting firm, highlights this trend, predicting that the proportion of companies allocating over 10% of their office portfolios to flexible workspaces will increase from 42% in the March quarter to 58% by 2026. Additionally, 30% of occupiers plan to expand their use of flexible office space within the next year, while 17% are likely to consolidate their offices into fewer locations.

Domestic occupiers show a stronger preference for flexible office spaces than their US counterparts, influenced by factors such as skilled workers’ availability, improved infrastructure, cost efficiencies, government support, and the benefits of entering new markets. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa at CBRE, noted, “The robust surge in occupier activity within the Indian office sector, highlighted by 2023’s absorption figures, the second highest ever recorded, underscores a remarkable trend.”

Over the past five years, flexible space operators have become significant players in the Indian office leasing ecosystem, capturing more than 15% of quarterly leasing. CBRE expects the stock of flexible spaces to reach 80 million square feet by the end of 2024. Shesh Rao Paplikar, Founder & CEO of Bhive, a Bengaluru-based flexible managed office company, said, “Managed workspaces have become the go-to partner for business enterprises for all their office infrastructure needs.”

The survey also revealed that office occupiers are considering decentralising their offices by combining traditional and flexible spaces to align with changing business needs. About 17% of occupiers focus on optimising their office portfolios for greater efficiency. Ram Chandnani, Managing Director of Advisory & Transactions Services at CBRE India, observed, “There is a clear preference for ‘office-first’ policies, reflecting an accelerated return to in-office attendance.”

Many Indian office market occupiers show strong confidence in the market’s potential as they pursue long-term portfolio expansion. Most BFSI, GCC, and technology firms plan to expand their portfolios in the next two years, with an expected growth of over 10%. These firms also increasingly favour an office-first approach, with 90% of respondents preferring to be in the office at least three days a week.

“The popularity of India’s software ecosystem continues to attract GCCs in significant numbers,” said Kunal Walia, CEO and founder of Simpliwork Offices. He added that many clients are now looking to expand their office space allocations after reducing their real estate portfolios over the past few years.

Beyond major cities like Bengaluru, Hyderabad, NCR, and Mumbai, occupiers have a growing interest in expanding operations in Chennai and Pune, driven by the preference for having real estate portfolios spread across various cities. This diversification strategy underscores the dynamic nature of the Indian office market as companies seek to adapt to the evolving work environment.

In conclusion, the shift towards flexible workspaces redefines the Indian office landscape, offering companies the agility and adaptability needed in today’s fast-paced business environment. With continued growth and innovation, flexible workspaces are set to play a pivotal role in the future of work in India.