Flexible office space set to surge 52% to 81 million sq. ft.

The flexible office space sector in India is poised for significant growth, with a projected increase of 52% to reach 81 million square feet by 2025, according to Vestian. Currently, flexible office space operators manage 53.4 million square feet, with over 0.76 million seats spread across more than 1000 centres in India. Vestian CEO Shrinivas Rao noted that India's flexible spaces sector is in its nascent stage compared to countries like the USA and Europe. He highlighted that the sector has grown steadily in India, reaching 53.4 million sq ft and is expected to expand to 81 million sq ft by 2025, growing at a CAGR of 23%, with COVID-19 accelerating market growth. The report highlighted that the adoption of flexible spaces in India began around 2015-16, gradually transforming from a fragmented and unorganised market into a more organised one. Flexible workspaces are now gaining attention not only from startups and SMEs but also from large enterprises. As many companies adopt a hybrid office model and return employees to the office, the demand for flexible spaces is expected to rise. Vestian predicts that flexible offices will constitute approximately 25% of overall office space absorption by 2025. The report also provided insights into the growth of flexible office space absorption and its share in overall absorption from 2016 to 2025. Flexible office spaces encompass various options, including dedicated desks, hotdesking, coworking spaces, and serviced, and managed office spaces. Coworking centres offer the most flexibility, while managed offices are at the less flexible end of the spectrum. The report identified 50 major flexible space operators, with the top 10 players holding 84% of the total flexible office space portfolio. Key office areas such as Whitefield in Bengaluru, Hitec City in Hyderabad, Baner in Pune, Andheri (E) in Mumbai, and DLF Cybercity in Gurugram are popular among flex space operators and tenants.