In response to the rising demand from corporate entities, the flexible office space sector is poised to witness significant surge, with its stock expected to rise by 52 percent by 2025, reaching a substantial 81 million square feet, according to a report by Vestian, a real estate consultancy firm. Currently, flexible office space operators in India have a total area of 53.4 million square feet under their operations. However, this figure is projected to escalate to 81 million square feet within the next four years.
The report 'Flexing the Workspace-Back to Office', highlights that more than 7.6 lakh seats are currently available within flexible space centers spread across over 1,000 locations across the country. Shrinivas Rao, CEO, Vestian, emphasised that the flexible workspace sector in India is still in its early stages compared to more mature markets like the USA and Europe.
He stated, "It has grown gradually in India, and flexible office stock has reached 53.4 million square feet. Furthermore, the stock is anticipated to reach 81 million square feet by 2025, growing at a Compound Annual Growth Rate (CAGR) of 23 percent, largely due to the catalysing effect of COVID-19 on market growth." The report highlights that the wider adoption of flexible office spaces in India began around 2015-16 when the market was fragmented and disorganised. Since then, it has experienced rapid growth and has become more structured. Flexible workspaces are now getting attention not only from startups and SMEs but also from large enterprises. Rao added, “Flexible space operators provide what occupiers are looking for low cost, flexibility, and technologically advanced spaces. While 2023 is likely to be a challenging year for businesses amid macroeconomic uncertainty and fear of recession, flexible spaces are seen as a way to navigate these global headwinds."
As many companies adopt hybrid work models and their employees return to the office, the demand for flexible office spaces is expected to surge further. Vestian has projected that the flexible office sector will constitute approximately 25 percent of the overall office space absorption by 2025. Flexible office spaces encompass a variety of options, including dedicated desks, hotdesking, coworking spaces, and serviced and managed office spaces. Coworking centers offer the highest level of flexibility, while managed offices are on the less flexible end of the spectrum, as mentioned in the report. The report also identifies 50 major flexible space operators in India, with the top 10 players holding an impressive 84 percent of the total flexible office space portfolio. Notably, key office areas such as Whitefield in Bengaluru, Hitec City in Hyderabad, Baner in Pune, Andheri (E) in Mumbai, and DLF Cybercity in Gurugram are highly popular among flexible space operators and tenants alike, showcasing the growing appeal of flexible workspaces in India's corporate landscape.
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