India's flexible workspace sector is experiencing robust growth, with flexible workspace operators registering a high gross leasing volume (GLV) of 12.4 million sq. ft. (MSF) in 2024, according to Cushman & Wakefield. This marks a 57.5 per cent year-on-year (yoy) growth, reflecting the surging demand for agile, new age and cost-effective office solutions across key cities.
The flexible workspace sector includes business centres, coworking centres and managed offices. Gross leasing volume, which is a factor in all leasing activity in the market, including fresh take-up, renewal of contracted terms by corporates, and pre-leasing, indicates overall market activity.
The flexible workspace sector's gross leasing volume now accounts for 14 per cent of India's total office leasing (89 MSF), highlighting its growing significance in commercial real estate.
Among India's top flexible workspace markets, Bengaluru led with 3.4 MSF of leasing volume, nearly doubling its previous year's tally. Mumbai recorded a 3x YoY growth in GLV, reaching 1.9 MSF, a testament to rising demand in India's financial capital. Delhi NCR at 2.3 MSF GLV, Hyderabad at 1.6 MSF GLV, and Pune at 1.6 MSF GLV emerged as strong flexible workspace hubs.
According to the data, evolving business priorities, the need for flexibility, the shift toward hybrid work models and strong enterprise demand for managed office solutions fueled historic highs in flex seats leased. Office space leased by flexible workspace operators is subleased out to end occupiers regarding seats, termed flex seat leasing. The end occupiers include a combination of companies such as startups, domestic firms, and multinational corporations. Flex seat leasing is a measure of demand in the flexible workspaces sector.
Around 224,000 seats were leased in 2024 by end occupiers from flexible workspace operators, a 44 per cent increase over 2023 (~156,000 seats). Regarding cities, Bengaluru again dominated with a 29 per cent share (~64,000 seats) in total seats leased in the year and maintained its status as India's leading flexible workspace market. Bengaluru was followed by Pune (~39,000 seats), Delhi NCR (~38,000 seats), and Mumbai (~28,000 seats) with shares of 18 per cent, 17 per cent and 12 per cent, respectively, in total seats leased. These three cities saw remarkable growth, reinforcing the appeal of flexible workspaces across key business hubs. The demand for flexible workspaces is driven by a diverse mix of end occupiers across multiple industries.
End occupiers of the IT-BPM sector dominated flex seat leasing in 2024 with around 48 per cent of total seats leased, followed by engineering & manufacturing occupiers with a share of 17 per cent. BFSI and Professional services occupiers contributed 10 per cent and 6 per cent to the seats leased in the year, respectively.
