Flex-space market to reach 126 mn sq ft by 2028
Real Estate

Flex-space market to reach 126 mn sq ft by 2028

According to a report by Avendus Capital, an investment bank for private equity advisory, it is anticipated that India's commercial real estate market will experience robust demand, leading to an increase of approximately 126 million sq ft at a Compound Annual Growth Rate (CAGR) of 15%, thereby tapping into a market worth USD 9 billion by 2028.

The demand for flexible workspaces is being primarily propelled by sectors such as IT & ITeS, BFSI, consulting, e-commerce, manufacturing, and new-age startups, alongside the continual establishment of global captive centres (GCCs).

It is stated that opting for space from a flexible workspace operator could result in cost savings ranging from 15% to 20% for the occupier compared to traditional leasing.

Prateek Jhawar, managing director and head of Infrastructure and Real Assets Investment Banking at the company, mentioned that the Indian office market has largely remained unaffected by global macroeconomic and sectoral challenges. He noted that with an increasing number of enterprises embracing remote workplace policies, there is a notable shift towards flexible and contemporary office solutions. He further added that despite robust demand, the primary challenge for flex workspace operators could revolve around securing quality real estate supply in the central business districts of the top 7 cities at favorable rents. Jhawar also expressed an expectation for at least four established players to go public in the next 2-3 years. Moreover, it was highlighted that the average per desk cost in prominent micro-markets of Tier I metro cities like Mumbai, Bengaluru, and Delhi NCR exceeds those in prominent micro-markets of other cities by over 50%.

Presently, flex workspace operators are witnessing stable-state, centre-level Internal Rate of Returns (IRRs) ranging from 30% to 35% in both co-working and managed offices. However, as the industry matures, it is anticipated that the returns profile will gradually stabilise towards IRR levels of 20% to 25%, which still surpasses the returns provided by some other real asset classes.

According to a report by Avendus Capital, an investment bank for private equity advisory, it is anticipated that India's commercial real estate market will experience robust demand, leading to an increase of approximately 126 million sq ft at a Compound Annual Growth Rate (CAGR) of 15%, thereby tapping into a market worth USD 9 billion by 2028. The demand for flexible workspaces is being primarily propelled by sectors such as IT & ITeS, BFSI, consulting, e-commerce, manufacturing, and new-age startups, alongside the continual establishment of global captive centres (GCCs). It is stated that opting for space from a flexible workspace operator could result in cost savings ranging from 15% to 20% for the occupier compared to traditional leasing. Prateek Jhawar, managing director and head of Infrastructure and Real Assets Investment Banking at the company, mentioned that the Indian office market has largely remained unaffected by global macroeconomic and sectoral challenges. He noted that with an increasing number of enterprises embracing remote workplace policies, there is a notable shift towards flexible and contemporary office solutions. He further added that despite robust demand, the primary challenge for flex workspace operators could revolve around securing quality real estate supply in the central business districts of the top 7 cities at favorable rents. Jhawar also expressed an expectation for at least four established players to go public in the next 2-3 years. Moreover, it was highlighted that the average per desk cost in prominent micro-markets of Tier I metro cities like Mumbai, Bengaluru, and Delhi NCR exceeds those in prominent micro-markets of other cities by over 50%. Presently, flex workspace operators are witnessing stable-state, centre-level Internal Rate of Returns (IRRs) ranging from 30% to 35% in both co-working and managed offices. However, as the industry matures, it is anticipated that the returns profile will gradually stabilise towards IRR levels of 20% to 25%, which still surpasses the returns provided by some other real asset classes.

Next Story
Infrastructure Transport

Tata, Airbus to Build India’s First Private Helicopter Line

In a landmark development for India’s aerospace sector, Tata Advanced Systems Limited (TASL) and Airbus will establish the country’s first private-sector helicopter assembly line in Vemagal, Karnataka. The facility will manufacture the Airbus H125 and H125M, marking a significant milestone in India’s push for self-reliance in aviation and defence manufacturing. The new Final Assembly Line (FAL) will produce the H125, the world’s best-selling single-engine helicopter, known for its versatility and performance in extreme environments. The first ‘Made in India’ H125 is expected to ro..

Next Story
Infrastructure Urban

NeGD to Support Bharat Taxi in Building Cooperative Ride Platform

In a significant move for India’s digital and mobility transformation, the National e-Governance Division (NeGD) of the Digital India Corporation, under the Ministry of Electronics and Information Technology (MeitY), has entered into an advisory partnership with Sahakar Taxi Cooperative Limited, the company behind Bharat Taxi — a first-of-its-kind, cooperative-led national ride-hailing platform. A Memorandum of Understanding (MoU) has been signed between NeGD and Sahakar Taxi to provide strategic advisory and technical support covering key areas such as platform integration, cybersecurity..

Next Story
Technology

MeitY Hosts Pre-Summit for India–AI Impact Summit 2026

The Ministry of Electronics and Information Technology (MeitY), Government of India, hosted a series of Pre-Summit events for the upcoming India–AI Impact Summit 2026 at the India Mobile Congress (IMC) 2025 in New Delhi. These sessions mark a key milestone ahead of the main summit, scheduled for 19–20 February 2026 at Bharat Mandapam, New Delhi. Delivering the inaugural address, S. Krishnan, Secretary, MeitY, highlighted India’s innovative and frugal approach to AI development. “We have adopted innovative means by learning from others’ experiences to build projects and products that..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?