According to a recent report by Cushman & Wakefield and managed workspace operator Table Space, flexible workspaces are witnessing unprecedented growth in India’s office leasing market. In the first half of 2024, flex spaces accounted for 12.7% of total office leasing, a significant rise from 10.2% in 2019. This marks the highest contribution of flexible spaces to overall leasing volume in India’s history.

The demand for flexible offices has surged post-Covid, driven by changing work preferences and cost considerations. From 85,234 seats in 2021, the number jumped to 155,000 in 2023. In just the first six months of 2024, 106,554 seats have been leased across India’s top eight cities, signalling a record-breaking year ahead. “With the first half of 2024 already accounting for 70% of last year’s total flex-space demand, we anticipate a potential record-breaking year for flex seat leasing,” said Ramita Arora, Managing Director at Cushman & Wakefield.

The report highlights that Information Technology (business process management) is the largest consumer of flexible spaces, occupying 50% of the total leases this year. Engineering and manufacturing firms account for 18%, while the banking, financial services, and insurance (BFSI) sector follows with 12%. The growing interest in flexible spaces is attributed to several factors, including cost efficiency, flexible lease terms, and the ability to customise workspaces.

The shift towards flexible spaces was catalysed during the COVID-19 pandemic when companies downsized conventional office spaces due to reduced demand. Post-pandemic, high costs and hybrid work models propelled companies to adopt flexible workspaces. These spaces are not only preferred by large corporations but have also become attractive for startups, freelancers, and small businesses looking for cost-effective, flexible office solutions.

Several major operators are capitalising on this trend. IndiQube and WeWork India plan to add 1.5 million square feet of flexible space in 2024-25, while 315Work Avenue aims to double its portfolio to 4 million square feet in the next 18 months. According to industry experts, this expansion aligns with increasing demand as businesses seek flexibility in an evolving work environment.

Crisil recently noted that flex offices are gaining popularity due to their customisable offerings and flexible lease terms. “Ongoing factors like talent access, flexible costs, risk-mitigated portfolios, and heightened business focus are pivotal drivers,” said Sameer Singh, COO of 91Springboard, a leading flexible workspace provider.

The flex space sector is set to maintain its upward trajectory, with supply increasing to meet growing demand. In the last five years, the total footprint of flexible space operators in India has doubled, with annual growth rates of 23% in 2022 and 18% in 2023, making this one of the fastest-growing segments in the office leasing market.

This rise in flexible office space adoption indicates a long-term shift in how companies view and utilise office spaces, catering to a more dynamic and cost-effective business environment.