India’s flexible workspace sector continues its rapid expansion, with the total supply reaching 58 million square feet across the country’s top eight cities as of the first half of 2024, according to a report by Cushman & Wakefield and Table Space. Bengaluru leads the charge, holding a 31% share of the flex space stock, followed by Delhi-NCR (16%), Pune (14%), Hyderabad (14%), and Mumbai (11%).

The first half of 2024 saw over 5 million square feet of new flexible workspace supply, building on the momentum from the last two years, during which capacities grew by 8-9 million square feet annually. This trend reflects an overall growth rate of 23% in 2022 and 18% in 2023. Ramita Arora, Managing Director of Bengaluru and Head-Flex at Cushman & Wakefield, noted, “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.”

The report highlighted the sustained 35-37% annual growth in the flexible office sector over the past 3.5 years, during which 450,000 seats were leased. This makes flexible workspaces the fastest-growing segment in India’s commercial real estate market. The IT sector is a significant driver of this growth, which accounted for 40-50% of seat absorption in the last 18 months. Other sectors such as engineering, manufacturing (14-18%), BFSI (9-12%), and professional services (11-12%) have also contributed to the demand.

Operators and occupiers alike are increasingly adopting managed office solutions (MOS) due to the customizability, shorter lease terms, and tech-driven enhancements that boost productivity. A Cushman & Wakefield survey indicated a strong shift towards workplace digitisation, superior facility management, and employee well-being initiatives. Focusing on sustainability goals is also critical in shaping the demand for flexible spaces.

The report also noted the growing interest in Tier II and III cities as decentralisation of the workforce and work-life balance become more important. Flexible spaces now account for 11-13% of the total office space demand nationwide, with smaller cities gaining ground in this evolving workspace landscape.

Interestingly, the number of active flex space operators has surged, with over 300 operators now in the market. However, the report pointed out that the top 5% of these operators control more than 50% of Grade A flexible workspace stock, further emphasising the dominance of key players in this booming sector.

With ongoing growth and increasing demand across multiple sectors, the flexible workspace industry is on track to set new records and reshape India’s commercial real estate market. The upward trend shows no signs of slowing down, positioning flex spaces as a crucial component of the modern work environment.