According to a report by Vestian, the flexible office space sector is set to experience substantial growth, reaching an estimated 81 million square feet (msf) by 2025, representing a remarkable 52 percent increase from its current size of 53.4 msf. This surge in flexible office space is primarily attributed to the evolving workplace dynamics, as many companies continue to embrace the hybrid work model for their employees.
Vestian’s report, titled “Flexing the Workspace – Back to Office,” also sheds light on the availability of flexible workspace options in India. It reveals that there are more than 1,000 centers across the country offering over 7.6 lakh seats for flexible working arrangements.
The report underscores the transformation of India’s flexible office space landscape, which initially emerged in 2015-16 in a fragmented and unorganized state but has since undergone rapid growth and organizational development. Notably, this growth has garnered attention not only from startups and small to medium-sized enterprises (SMEs) but also from large enterprises.
Shrinivas Rao, CEO of Vestian, highlighted the significant potential for further growth in the flexible office space sector in India. He mentioned that, compared to countries like the United States and European nations, India is still in the early stages of embracing flexible workspaces. The report predicts that the Indian flex office space inventory will expand to 81 msf by 2025, boasting a compound annual growth rate (CAGR) of 23 percent, largely catalyzed by the impact of the Covid-19 pandemic on work arrangements.
As companies adopt hybrid work models and gradually bring employees back to the office, the demand for flexible office spaces is anticipated to surge. Vestian’s projections indicate that by 2025, flexible office spaces will account for approximately 25 percent of overall office space absorption.
The report also distinguishes between various types of flexible workspaces, with coworking centers representing the most flexible end of the spectrum, while managed offices are deemed less flexible.
Furthermore, the report identifies 50 major flexible space operators, with the top 10 players collectively holding 84 percent 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 have become sought-after locations for both flex space operators and tenants.
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