India’s coworking future is shifting from metros to 500+ Tier 2 and 3 cities, driven by talent retention, local GCCs, and startups. Innovative models of government incubators, PPPs, university-linked hubs, plus capex-light economics and community focus, require supportive policies for scalable, sustainable flex spaces across Bharat’s diverse ecosystems.
By Kushal Bhargava, Co-founder – MyBranch Services Pvt. Ltd.
For the past decade, India’s coworking story has been written primarily on metros. Gurugram’s towers, Bengaluru’s hubs, and Mumbai’s flexible campuses were the markers of the industry’s success. Yet today, the true story of coworking’s future is different.
“ICRA expects 125 million sq. ft. of coworking space by 2027″—yet much of it will still be limited to just six metro cities. The question I keep asking myself is: What about the next 500 towns where India works, lives, and builds?
Cities such as Warangal, Nashik, Coimbatore, Ludhiana, and Dehradun are already proving that the real flex revolution will be authored in Tier 2 and Tier 3 markets.
Coworking’s Next Big Gamble Isn’t Vertical, it’s Decentralised
India’s coworking industry is on an accelerated growth path, with ICRA anticipating a 21–22% CAGR fueled by enterprise adoption, startup growth, and hybrid work tailwinds. However, the metros, which drove this boom, are now suffocating under their own success. Through-the-roof rents, low job vacancies, and saturation have made sustainable growth increasingly tricky in the top six cities.
So, where does the flex movement head from here?
For me, the future lies beyond the metro skyline, in India’s 500+ Tier 2 and Tier 3 cities. From Hubballi and Siliguri to Rajahmundry and Gorakhpur, from Guntur to Warangal and Dimapur, this is where India’s workforce is now anchored, where companies are growing locally, and where demand for next-generation workspaces is exploding.
And this isn’t a spillover, it’s a strategic shift I’ve seen play out on the ground, driven by three very real forces:
Talent is choosing roots over metros
Following the pandemic, I’ve noticed an increasing number of professionals opting to stay closer to home. What began as reverse migration has now become a lifestyle choice fueling consistent demand for high-quality workspaces in Tier 2 and Tier 3 cities.
GCCs are now going local
Through my interactions with mid-sized GCCs from the IT, BFSI, and healthcare sectors, one thing is evident: they’re no longer only focused on metros. They’re establishing satellite teams in non-metros to access new talent, drive cost efficiency, and achieve resilience.
Startups aren’t just starting up—they’re staying
I’ve seen cities like Coimbatore, Bhubaneswar, Indore, and Amritsar evolve from being mere launch pads to becoming full ecosystems with incubators, funding networks, and formalisation kicking in.
But building for Bharat, in my experience, isn’t as simple as planting desks in smaller towns. It requires new models of infrastructure, economics, and collaboration.
In recent years, I’ve observed three models of Bharat’s flex hubs taking shape.
– Government-sponsored incubators in cities such as Trichy have demonstrated that when civic authorities take the initiative, coworking can serve as a launchpad for both local entrepreneurship and innovation. These aren’t business-for-profit ventures, but these are civic experiments to nurture local entrepreneurship and innovation. When the Trichy City Corporation opened its first coworking space in 2024, it wasn’t merely about Wi-Fi and desks. It was about integrating training programs, skilling modules, and startup assistance all under one roof.
– PPP-fueled innovation districts are yet another trend I notice taking shape. Places like Vizag and Amaravati already demonstrate how the optimal public–private split can speed up employment generation and skills upgrade. Here, the government provides real estate or funding, and private operators step in to run the show. What excites me about this model is the clarity of outcomes, job creation, upskilling, and digital enablement, not just occupancy numbers. Andhra Pradesh, for instance, has reached the lofty target of developing 150,000 coworking seats by 2025 via PPPs and rent subsidies.
– University-linked flex campuses are something that has intrigued me personally. In study centres such as Coimbatore and Bhubaneswar, educational institutions are converting underutilised space into dynamic flex campuses for students, startups, and alumni communities. Universities are no longer mere centres of study; they’re turning into hubs for future-generation work ecosystems. Through collaboration with coworking operators, they’re converting underutilised buildings into energetic flex campuses where students, researchers, and alumni startups thrive. Bhubaneswar already has hubs with high-speed internet, meeting rooms, and day passes just outside university gates, squeezing campus and workplace together.
From my vantage point, what truly gets these models going is not the physical infrastructure alone. It’s the capex-light, people-first economics behind them, where they’re rewiring existing assets rather than constructing glitzy new ones, and layering coworking over skilling programs, incubation services, and even civic initiatives. This combination doesn’t merely make costs workable; it creates stickiness in the system. Of course, operators can’t scale this alone. To truly unlock the real potential of coworking in tier 2 & 3 cities, we’ll need enabling policies, single-window clearances, rationalised property taxes, and ESG-linked financing for sustainable retrofits. These aren’t just Wishlist items; they’re the levers that will decide how fast and how far Bharat’s coworking story goes.
Strategic Sweet Spots
Not every Tier 2/3 city is created equal when it comes to coworking readiness. Some have become strategic growth hubs due to encouraging policies, GCC uptake, or dynamic startup scenes.
Indore, Vizag, Trichy, Coimbatore, and Nashik are at the forefront, while smaller Tier 3 centres like Ratlam, Gangtok, and Rajahmundry are already giving early indications of becoming flexible-ready ecosystems.
What is most promising to me is that these cities aren’t adopting metro blueprints. They’re creating models that function for their own environments.
Making the Math Work
From what I’ve observed, the sustainability of coworking in smaller cities doesn’t come from plush lounges or metro-style pricing; it comes from getting the economics right. Operators here thrive by being smart, scrappy, and deeply connected to their communities.
– Capex-light retrofits are usually the first move. Rather than constructing gleaming new towers, most effective hubs reuse what’s already on hand—an idle retail floor, a coach centre, even a half-occupied office block. Modular constructions and staged rollouts allow for costs to be reduced by as much as 60%, and operators can gauge demand first before expanding further.
– Next is revenue stacking. Where coworking in itself can propel margins in metros, Tier 2 and Tier 3 premises tend to combine functions—coworking during the day, skilling centres in the evening, and incubation programs stacked on top. The outcome? Greater utilisation, varied income streams, and even 20–35% extra revenue per square foot in some instances.
However, in my opinion, the true differentiator is community-driven operations. This is not merely about organising events—it’s about integrating the space within the neighbourhood fabric. Mentor circles, pitch nights, cultural clubs—these bottom-up interactions build a sense of belonging and commitment. And when churn reduces, the numbers begin to favor you. In Bharat’s case, community is not an afterthought; it is the offering.
Policy Enablers: What’s Needed to Scale
Operators can only do so much; Bharat’s flex story will scale only when policy steps up to support the ecosystem.
The first major reform must be single-window permissions. Today, operators lose months navigating multiple municipal bodies for clearances. A streamlined system already being considered by states like Telangana and Karnataka could save critical time and costs.
Then we must redesign property tax regimes. Currently, shared workspace centers remit full commercial tax even when they have only half their seats occupied. But imagine if rebates were linked to a demonstrable effect e.g., number of startups nurtured, jobs generated, or young people trained. That would incentivise operators who share civic and economic goals.
And last, but certainly not least, ESG-linked funding must go mainstream. Converting existing buildings into energy-efficient flexspaces is costly at the outset, particularly in Tier 2 and 3 cities where the margins are thin. Andhra Pradesh’s decision to make such projects eligible for ESG infrastructure grants is a big step forward, but we need such incentives at scale. Short of that, if Bharat flex must hit a million seats, it won’t be merely through entrepreneurial determination; there will need to be a policy push that is as visionary as the operators themselves.
Conclusion: The Bharat Flex Blueprint
India’s coworking story is no longer being written only in the glass towers of metros—it’s now unfolding in towns that are fast becoming talent clusters, innovation hubs, and growth engines.
With the right mix of policy support, sustainable economics, and community-led ecosystems, the next 1 million flex seats will rise not just in Gurugram or Bengaluru, but in places like Varanasi, Ludhiana, Jodhpur, Gorakhpur, and Dimapur—where India truly lives, works, and aspires.
For me, this isn’t about chasing market forecasts; it’s about a vision of decentralised growth that empowers people to thrive where they are, without uprooting themselves. Because this isn’t just about creating workspaces, it’s about building the future of work, the future of Bharat.
