Industry leaders share insights about the rapidly changing landscape of flex spaces, focusing on scalability, compliance, partnerships, and technological integration. Here are the key takeaways that reveal the exciting direction in which the industry is heading.
Gautam Saraf, MD, Mumbai & New Business, Cushman & Wakefield, highlighted the importance of scalability in ensuring the longevity and success of flex businesses. He emphasized that flex spaces are no longer just about providing office space but need to cater to a growing demand for diverse services. He stated that the flex industry is inherently capital-intensive and that scalability becomes key to surviving the competitive landscape. He also spoke about the role of collaboration in driving growth, particularly in markets where flex operators are just beginning to establish their presence. In such regions, Saraf proposed that operators collaborate with other businesses, both within the real estate sector and beyond, to meet the demands of clients.
New business models will continue to evolve. For rapid growth, collaboration and partnerships are critical, especially in regions where the presence of a flex operator is limited. Gautam Saraf
From Offices to Experience Centers
Also seen is the shift underway toward offering customizable solutions that cater to a variety of professional needs and personal preferences. As part of this evolution, event spaces and meeting rooms, services that were once the domain of hotels, are now standard offerings at many flex locations. In the future, the lines between traditional office spaces and hospitality services will blur, creating a more versatile environment for work, collaboration, and leisure.
Princy Goyal, Co-Founder & CEO of Wybrid Technology, took a forward-looking approach, envisioning flex spaces not just as places for work but as experience centres. Goyal remarked that Flex has always brought together multiple services for clients, such as accounting, HR, and hospitality. She proposed that over the next few years, flex spaces will increasingly focus on creating an experience that blends office work with elements of hospitality and leisure. According to Goyal, this will include offering services like hotel accommodations, overnight stays, or access to business clubs as part of the flex offering.
Trends like hybrid work, dynamic pricing, and the integration of live inventories will make the flex space experience more adaptable. Users will be able to pay based on usage rather than committing to long-term contracts.
Going forward, flex spaces will integrate hospitality more, providing seamless, all-in-one solutions. The rise of dynamic pricing will allow clients to book spaces with the same flexibility they enjoy with airline or hotel reservations. Princy Goyal
Flex Spaces Rise in Small Cities
A critical aspect of flex space operations is the tenant mix. The demand for temporary office spaces, particularly for project-based or contract work, has been strong in smaller cities, where companies seek flexible, short-term agreements.
In terms of size, flex centres in smaller markets are generally smaller than their metropolitan counterparts, often ranging between 2,500 and 5,000 square feet in carpet area. However, demand is growing rapidly. Landlords in these areas are seeing up to 30% rent growth during lease renewals, signalling strong appreciation in the value of flex spaces. The increasing recognition of the value of flexible, short-term office space is one of the driving factors behind this upward trend
Paras Arora, Founder & CEO of Qdesq, provided a fascinating look at the growth of flex spaces in tier 2 and tier 3 markets. He shared that while demand from small businesses and startups was once dominant, large Indian enterprises are now driving the growth of flex spaces in smaller cities. This shift has been accelerated by the decentralization of offices following the COVID-19 pandemic.
As the nature of work changed, many enterprises reduced their physical footprint, opting for flex spaces to accommodate smaller, decentralized teams. Arora revealed that while large campuses in these cities once spanned 100,000 square feet, companies are now settling into smaller spaces of around 30,000 to 40,000 square feet, often spread across multiple locations.
Tier 2 and tier 3 markets have become increasingly important for large enterprises looking for flexibility and cost-efficiency. Industries like banking, financial services, and consulting are especially keen on expanding into smaller cities. Paras Arora
Sustainability: A Key Demand
Another bold stride in the flex space sector is the growing importance of sustainability in the selection of office spaces. Sustainability is no longer just a concern for tenants; it’s also a priority for flex space operators, who are now under pressure to align with Environmental, Social, and Governance (ESG) criteria. As businesses increasingly focus on sustainable practices, the demand for flex spaces that meet these environmental standards continues to rise.
Sanjay Chatrath, Co-Founder & Managing Partner at Incuspaze, shared his views on the post-COVID real estate market. He noted that there was a time when it was relatively easy to negotiate rent-free periods and favorable lease terms with grade-A developers. Today, the tables have turned, and the commercial real estate landscape in India is thriving. The market is no longer solely focused on large discounts or concessions. Instead, there is a growing emphasis on quality and sustainability.
Chatrath emphasized that developers and operators must now consider ESG standards as critical components when designing and operating commercial properties.
The rise of ESG compliance is not limited to high-end clients. As sustainability becomes a key decision-making factor for businesses globally, more clients are seeking out spaces that align with their environmental values. This shift toward green building certifications and environmentally conscious design is creating new opportunities for developers and operators to cater to a more eco-conscious demographic
The shift towards sustainability is an essential trend in the global commercial real estate market, and it is increasingly influencing the Indian market as well. Sanjay Chatrath
Zishan Khan, Director of Revenue at AKT Space, elaborated on how sustainability has been integrated into both the design and operations of flex spaces. For example, energy-efficient systems, water conservation measures, and waste management programs are now common in flex spaces. The importance of employee well-being was also emphasized by Khan, who noted that employees are looking for spaces that support both their professional and personal needs. This includes access to wellness programs, ergonomic furniture, and spaces that promote creativity and collaboration. As flex spaces continue to integrate sustainability with employee-focused amenities, they will play an increasingly important role in attracting and retaining top talent.
With hybrid work models and a focus on sustainability, the flex industry is poised for exciting developments, with technology and human-centered design working together to meet the challenges and opportunities of the next decade.
The future of flex is not just about providing flexible office space; it's about creating environments that are environmentally conscious, socially responsible, and aligned with the ESG goals of the companies that occupy them. Zishan Khan
Technology for Scalability
Technology has already had a significant impact on the flex industry, but the potential for further innovation is enormous. The role of technology and Artificial Intelligence (AI) in improving the operational efficiency and customer experience of flex spaces cannot be emphasized enough. While technology has been integrated into the flex space sector, it has not yet reached its full potential.
Kushal Bhargava, Co-Founder of MyBranch Services Private Limited, highlighted how AI and digitalization could be used to enhance services like client onboarding, space management, and predictive analytics. For example, AI-powered systems can collect and analyze data about user preferences and behavior, allowing flex operators to customize their offerings. This could include identifying trends in meeting room bookings, coffee consumption, or even preferred desk arrangements. However, the industry is still in its early stages of adopting advanced technologies. While technology will play a central role in streamlining operations and improving customer experiences, people will remain at the heart of the flex ecosystem. The human connection, whether in customer service, community building, or relationship management, will continue to be essential.
Before we can fully integrate AI, we need to establish basic digitization practices. Once operational processes are digitized, AI can then be leveraged to optimize services, predict demand, and offer personalized solutions to flex space tenants. Kushal Bhargava
Managed Spaces Demand
The real estate market is an ever-evolving entity, and diversification is critical. The evolution of the market necessitates flexibility, especially when catering to different client segments. As per Kaushik Shah, National Director, Occupier Strategy and Solutions at Knight Frank India, there are various factors that influence a balanced business portfolio in commercial real estate. To ensure sustainable success, a mix of various approaches is essential. This means it must include both owned assets and assets on plain rental, as markets can change at any time. His advice centered on the importance of adapting quickly to shifting client demands.
For businesses that can remain nimble and embrace flexible pricing models, such as profit-sharing agreements or mixed-use spaces, the rewards can be significant. Kaushik Shah
Indeed, there are cost-sensitive clients who are highly influenced by market conditions, requiring more affordable solutions. The markets will change, and there will be many other factors that come into play. Anshu Sarin, CEO of 91 Springboard, agreed that relying solely on rental income is increasingly risky, as the demand for commercial spaces fluctuates with market dynamics. Businesses must diversify their strategies by incorporating partnerships with developers, landlords, and other stakeholders. This approach can involve revenue-share or profit-share agreements, which can reduce the risks associated with high rental costs and offer a more balanced approach.
Businesses must diversify their strategies by incorporating partnerships with developers, landlords, and other stakeholders. This approach can involve revenue-share or profit-share agreements. Anshu Sarin
Partnerships and Creative Deal-Making
A positive shift is emerging in the developer-operator relationship. Rahul Kanungo, National Director of Sales at Awfis Space Solutions Ltd, corroborated that these days, it’s fortunate that developers have truly understood that it’s not just the clients they are leasing for; it’s a value-added service for that particular building. Rahul explained that this evolving relationship has provided the necessary comfort to structure deals with developers in ways that benefit both parties.
There has been a marked improvement in the comfort level when entering into structured deals with developers, making it easier for operators to attract clients in various market segments. Rahul Kanungo
Structured Deals and Creative Partnerships
Structured deals that include elements such as shared profits or revenue guarantees are proving to be a successful model in this new market landscape. For example, developers may be willing to invest in capital expenditure (CapEx) improvements or renovations in exchange for future revenue-sharing arrangements with operators. This partnership approach allows for a more balanced risk-sharing scenario, where both the operator and developer can benefit from the upside of a growing market.
Ashish Goenka, Director of Marketing & Strategy at Redbrick Offices Ltd, emphasized that developers should see operators as partners rather than just tenants. This shift in perspective is crucial because it opens doors for creative deal-making. Developers are no longer merely focused on lease terms but are now actively engaged in creating win-win situations where both operators and developers can share the benefits. This collaboration is seen in partnerships that extend beyond the traditional landlord-tenant model.
Operators and developers are increasingly working together to create value-added spaces, such as those that offer more sustainable, flexible, or technologically advanced features. Ashish Goenka
Vaibhav Joshi, Executive Director at Tablespace, stated that the role of technology cannot be overstated in today’s commercial real estate market, as customized solutions for enterprises drive growth potential.
The integration of smart technologies, such as automation, data analytics, and cloud-based solutions, is transforming the way operators manage their properties. For large enterprises, these technologies enable greater flexibility in terms of space planning and seating. Businesses can now optimize their office spaces in real-time, adjusting their floorplans as their needs evolve.
This level of agility is a major selling point for enterprise clients who are looking for adaptable work environments that can accommodate future growth. Vaibhav Joshi
Developers and operators are finding innovative ways to structure deals, meet client needs, and ensure that their portfolios remain balanced. As they continue to embrace new strategies, such as mixed-use models, revenue-sharing partnerships, and sustainable building practices, the sector is set to evolve in ways that benefit all stakeholders.
