Indian industry leaders insights on “The New Workspaces Era”

Written by Isabella Toledo

The flex office market in India is experiencing rapid growth, fuelled by demand for adaptable workspace solutions that meet the diverse and shifting needs of businesses. The segment now represents around 10% of India’s total commercial real estate and is projected to expand to 140 million square feet by 2027.

Offerings such as virtual offices, on-demand services, and pre-built shared spaces enable companies to scale quickly and remain agile, while also providing the flexibility to secure anything from a professional address to a full office without committing to long-term leases or high fixed costs.

Geographic and Sectoral Demand

Bangalore currently leads the market, accounting for 33% of demand, followed by NCR, Hyderabad, and Pune. While Tier 1 cities dominate, there is a notable rise in interest from Tier 2 markets, which, although still a smaller segment, are expected to grow over time. 

Demand is led by startups, accounting for 43% of the market, followed by SMEs (29%), and Indian corporates (15%). The IT/ITeS sector remains the largest user, while BFSI has shown strong growth as compliance concerns over shared spaces ease. 

Another major growth driver is the rise of Global Capability Centres (GCCs), which have evolved from back-end support units into innovation hubs hosting senior talent, reinforcing India’s role as an international centre for technology and high-value job creation.
 
Investment Momentum and Market Consolidation

The sector’s growth is drawing significant investment, with leading operators securing over USD 1 billion from private equity, family offices, and real estate developers eager to capitalise on the sector’s strong returns. 

This is driving consolidation, with several players preparing for IPOs and larger operators acquiring established brands to strengthen their presence in underrepresented regions. Despite this, the market remains fragmented, leaving room for further mergers and acquisitions.

From Functional Offices to Experience-Led Spaces
Gone are the days when offices were purely functional spaces. Today, organisations view the workplace as a strategic tool for talent retention and brand positioning. This has led to designs that prioritise experience, offering wellness centres, business hubs, community areas, and food & beverage options. 

While location and access still drive decision-making, especially in space-constrained cities such as Mumbai, high-quality amenities have become an important differentiator once core needs are met. Mature organisations see such investments not as costs, but as long-term assets that future-proof operations and support employee engagement.
 
Flexible Leasing Models and Developer Partnerships
Leasing strategies are becoming more agile, with Indian developers showing exceptional flexibility compared to global counterparts. Shorter lock-ins, break clauses, and even zero reinstatement terms are becoming common. 

Flex operators play a critical role in distributing costs across multiple tenants, making high-end amenities accessible to smaller occupiers. Revenue-sharing and management agreements are also gaining traction, reflecting a shift towards hospitality-style service models in the office sector.

One of the fastest-growing trends is fit-out leasing, where landlords or specialised firms finance, design, and deliver customised office interiors, allowing occupiers to conserve capital while gaining tax benefits. 

Hybrid flex arrangements, combining elements of managed offices and traditional leases, are also on the rise, catering to clients who want control over their space but prefer not to invest in depreciating assets.

The ESG and Wellness Imperative
Environmental, Social, and Governance (ESG) priorities are now central to workspace planning. While green building certifications are common in India’s office market, ongoing data transparency - tracking energy use, water consumption, and waste - is still evolving. 

Grade-A occupiers demand wellness-certified buildings, sustainable operations, and visible commitments to employee well-being. This focus is particularly strong among companies that see talent as their most valuable asset, with these features viewed as integral to retaining top performers.
 
Artificial Intelligence (AI) and Tech Transforming Operations
From predicting cab and meal bookings based on employee schedules to optimising desk and meeting room usage, new technologies are streamlining workplace operations and enhancing the user experience. 

By leveraging these tools, employees can pre-book parking, order food & beverages in advance, and personalise environments - adapting temperature, lighting, and even seating arrangements to individual preferences. 

Real-time occupancy data also enables facilities teams to adjust services dynamically, ensuring spaces remain comfortable and functional, while boosting satisfaction and engagement.

Additionally, AI can reduce cognitive load by automating routine tasks and providing actionable insights into space utilisation. This allows teams to reconfigure layouts to match shifting work patterns, creating workplaces that are more responsive, intuitive, and aligned with employee needs.

AI also is expected to create more jobs than it displaces, driving demand for adaptation, reskilling, and specialised infrastructure such as lab spaces, data centres, and collaborative environments, further influencing how workplaces are planned and operated.