The coworking industry in India is undergoing a transformative phase driven by shifting workplace dynamics, a surge in hybrid work models, and increasing demand from enterprises and startups. As office space costs soar and businesses reconfigure their workspace needs, coworking startups are stepping in to fill the gap, reshaping the country’s commercial real estate landscape.

The Shift Back to Office and Evolving Work Needs

With the pandemic-driven remote work trend waning, businesses seek balanced workspace solutions. Hybrid models are becoming the norm as companies adapt to employee preferences and operational needs. Zerodha, for instance, adopted hybrid working in 2023. Reflecting on the shift, its CTO, Kailash Nadh, noted, “Remote work worked great initially but became detrimental to creativity and collaboration over time.”

According to CBRE’s India Office Occupier Survey, flexible workspaces comprise over 15% of the total office leasing market, with nearly 50% of companies designating 10% of their flexible office spaces. This number is expected to rise to 60% in the coming years. Meanwhile, average office rental costs in major cities, including Bengaluru, Mumbai, and Hyderabad, have surpassed pre-pandemic levels, fueling demand for cost-efficient, flexible office options.

IPO Boom Elevates Coworking Startups

The booming demand for coworking spaces has propelled many startups into public markets. Mumbai-based Awfis set the benchmark earlier this year with a highly successful IPO, where shares were oversubscribed 108 times and gained over 60%. Awfis CEO Amit Ramani attributed this success to multiple factors: “The evolving workforce, expansion of Global Capability Centers (GCCs), a thriving startup ecosystem, and strong economic reforms are key catalysts.”

Following Awfis, Smartworks, DevX, and Indiqube are preparing for their IPOs with plans to leverage the funds for brand expansion and market growth. Bengaluru-based Table Space has also announced its intent to go public next year, valuing the company at $2.5 billion. WeWork India, another major player, is reportedly planning to raise between ₹3,153–₹3,874 crore through an IPO in 2025.

For early investors, the IPO trend signals an opportunity for significant returns. Brijesh Damodaran, the managing partner at Auxano Capital, emphasised, “Early investors are seizing lucrative opportunities to exit their investments as demand for office spaces continues to rise, signalling a recovery in commercial real estate.”

Expanding Beyond Metro Markets

The flexible workspace sector is poised to grow to 126 million square feet by 2028, with a projected CAGR of 15%. While metro cities like Bengaluru, which accounts for 31% of the flexible workspace inventory in Tier-I cities, remain dominant, coworking companies are increasingly targeting non-metro regions.

Awfis, for instance, has doubled its Bengaluru operations while expanding into Tier-II and Tier-III cities, such as Pune and Gujarat International Finance Tec-City (GIFT City). Similarly, Smartworks plans to establish a presence in cities like Ahmedabad, Surat, Vadodara, Jaipur, and metro areas.

“Tier-II and Tier-III cities are the next frontiers for coworking providers,” said Ramani, underlining the shift toward emerging markets. These regions are rapidly becoming startup hubs, driven by favourable economic conditions and a growing talent pool.

A Dynamic Real Estate Landscape

The rise of coworking spaces reflects broader trends in India’s commercial real estate market. Flexible workspaces are no longer just cost-effective alternatives; they have become central to modern office strategies, offering scalability, agility, and collaboration opportunities.

With IPOs driving expansion, coworking startups are well-positioned to capitalise on evolving workforce needs. As companies seek innovative, tech-enabled offices, the coworking sector is poised to play a critical role in shaping the future of workspaces in India.

A Promising Future for Coworking

The coworking industry’s momentum shows no signs of slowing. With hybrid work models here to stay, flexible spaces will continue to gain traction. Supported by growing investments and IPO activity, coworking startups are expanding their reach to meet the needs of a diverse workforce across metro and non-metro cities.

India’s coworking revolution is more than a post-pandemic trend—it’s a long-term solution for a dynamic and competitive workspace ecosystem. As demand accelerates, the industry is set to redefine how businesses operate, offering a flexible, sustainable, and collaborative approach to office spaces.