The flexible workspace sector in India has undergone a remarkable transformation over the past few years, establishing itself as a dynamic, rapidly growing market. As businesses around the world adapt to the changing landscape of work, India has emerged as a leader in Asia’s flex workspace revolution. From the growth of Global Capability Centers (GCCs) to the influx of financial support, the demand for managed office spaces has skyrocketed, positioning India as a key player in the global market.
Managed office spaces in India have become an increasingly attractive choice for businesses seeking flexibility, cost-effectiveness, and scalability. These spaces offer more than just physical office environments - they integrate cutting-edge technology, provide tailored solutions, and utilize data-driven insights to optimize workspace utilization. In a time when businesses are under pressure to enhance productivity, cut costs, and improve employee experiences, flexible office solutions offer a compelling answer. This is why the sector is projected to grow at a compound annual growth rate (CAGR) of 15%, representing a USD 9 billion opportunity by 2028.
Hemant Lath, Director of Strategy at Simpliwork Offices, emphasizes the growing significance of this sector, noting, "The demand for managed office spaces in India has seen exponential growth, driven by the unique requirements of both large multinational companies and growing startups. From 29.3 million square feet of managed office space in 2019, the market has surged to 61 million square feet in 2023, and it's expected to hit 126 million square feet by 2028, according to recent reports. This growth is a testament to India’s evolving role as a leader in Asia’s flex workspace market."
One of the most significant drivers of demand for managed office spaces in India is the rapid expansion of Global Capability Centers (GCCs). These centers serve as operational hubs for multinational corporations, handling everything from IT support and finance to customer service and R&D.
"The flexibility and scalability of managed office spaces align perfectly with the dynamic nature of GCCs," says Lath. "As these centers expand and adapt to growing business needs, they require office spaces that can scale quickly and efficiently. India, with its robust infrastructure, large, skilled workforce and cost advantages, is the ideal location for this kind of growth."
According to recent reports, India’s GCC market is poised to expand from $64.6 billion in 2024 to between $99 billion and $105 billion by 2030. With nearly 2,100 to 2,200 companies expected to operate GCCs in India by 2030, the demand for office space will only continue to rise.
"Cities like Bangalore, Hyderabad, and Chennai are already major hubs for GCCs, and as these centers grow, they will continue to fuel the demand for flexible office spaces," Lath explains.
The rapid rise of the flexible workspace sector has not gone unnoticed by financial institutions. Recognizing the market’s potential, banks and other financial bodies are now offering more favourable financing terms to operators in the sector.
Lath highlights the importance of financial support in driving growth. "The influx of capital has allowed providers to expand their portfolios and offer more diverse and sophisticated services to meet the needs of large-scale clients, particularly the growing GCC sector. Financial institutions are playing a crucial role in ensuring the continued expansion and evolution of this market."
“The Indian government has also contributed to the growth of the flex workspace sector by introducing economic policies that support foreign investments and reduce tariffs, particularly those on imports from the United States. These moves are expected to create additional demand for manufacturing, IT, and back-office functions, all of which will drive the need for more flexible office spaces.”, Lath adds.
A surge in the value of the U.S. dollar has further boosted the appeal of India as a hub for Global Capability Centers.
"The USD surge has played a critical role in making India an even more attractive destination for global businesses," says Lath. "With the cost advantages increasing, companies are looking to India to set up or expand their GCCs, and this naturally leads to more demand for high-quality office spaces."
The future of India's flexible workspace market looks incredibly promising, with the country poised to become the global hub for flexible office solutions as the market continues to mature.
As Lath concludes, "India is on track to lead Asia in the flexible workspace revolution. With a supportive ecosystem, growing demand, and evolving business needs, the market is poised for long-term growth, making it an exciting time for both operators and clients in the sector."