India’s office real estate market is undergoing a structural shift as managed and flexible workspaces move into the mainstream. Smartworks’ Harsh Binani highlights rapid supply growth, rising enterprise adoption, strong occupancies, and long-term contracts, positioning flexible offices as a core pillar of India’s evolving commercial real estate ecosystem.
India’s office real estate sector is witnessing a fundamental transformation, with managed and flexible workspaces emerging as a long-term growth engine rather than a short-term cycle. According to Harsh Binani, Co-founder and Executive Director of Smartworks Coworking Spaces, the country is at the center of a major reset in how enterprises consume office space. He described the moment as a “new revolution” and said India is now at the “epicentre of the office revolution,” driven by changing corporate priorities around flexibility, scale, and cost efficiency.
Binani highlighted the sheer scale of opportunity ahead. India has added nearly 1 billion square feet of office space over the last 80 years, and a similar volume is expected to come up over the next 10 to 15 years. Within this expansion, managed and flexible offices have “emerged as a Phoenix in this category,” clearly pointing to a “structural shift” in enterprise real estate strategies.
Market Confidence and Investor Validation
This shift is increasingly reflected in capital market sentiment. Kotak Institutional Equities recently initiated coverage of Smartworks with a positive outlook, forecasting EBITDA growth at a 38% compound annual rate over FY25-FY28. The brokerage expects the company’s operational footprint to scale to 14.5 million square feet, supported by rapid expansion and operating leverage.
Investor optimism has already translated into market performance. Smartworks, headquartered in Gurugram, currently has a market capitalisation of about ₹5,754 crore, and its stock has gained nearly 14% since its July 2025 listing. The performance underscores growing confidence in managed workspace platforms as durable commercial real estate businesses rather than speculative plays.
Scale, Long-Term Contracts, and a REIT-Like Model
Operationally, Smartworks is positioning itself as a key beneficiary of enterprise-led demand. Managing around 14 million square feet, the company is growing at roughly one-and-a-half times the industry’s average growth rate of 20%. Binani said the company’s focus is on onboarding large enterprises through long-duration contracts, creating what he called a “REIT-like annuity model.”
Scale remains central to this strategy. Smartworks plans to add 2.5 to 3 million square feet every year, using size and network depth as a competitive moat. Occupancy trends support this approach, with assets older than 12 months consistently reporting utilisation close to 90%.
Profitability, Cash Flows, and Balance Sheet Strength
On margins, Binani explained that profitability gains will largely come from operating leverage as the core business expands. While Smartworks is developing value-added services around its workspace platform, he noted that it is “still very early days” for these offerings. The managed workspace business itself, he said, has sufficient runway to drive both growth and margin expansion.
Addressing cash flow concerns, Binani clarified that the temporary dip in Q2FY26 was a strategic decision, post-IPO, to “block a lot of great supply” for future growth. He stressed that the business is self-sustaining, has negative net debt, and does not require additional capital to meet its expansion targets.
Developers Endorse Flexible Offices as Mainstream
Perhaps the strongest signal of structural change is developer participation. Partnerships with large real estate groups such as DLF, Panchshil, and the Hiranandani Group reflect growing acceptance of managed workspaces as a core part of India’s commercial real estate ecosystem. As Binani noted, these collaborations reinforce the idea that flexible offices are no longer an alternative—they are becoming mainstream.
