Flexible Office Space Market Likely To Rise 60% To Over Rs 14,000 Crore This Fiscal: Report

India's flexible office space market size is estimated to rise 60% to over Rs 14,000 crore this fiscal due to an increase in rent charged by operators per desk and portfolio expansion, according to Upflex India report.

Upflex India, a marketplace for flexible workspaces, has released its first report 'Co-Working and Managed Offices Redefining the Indian Commercial Real Estate'. Real estate consultant Anarock brought US-based Upflex to India in 2021.

As per the report, the annual co-working market size in terms of rental income is estimated to rise to Rs 14,227 crore this fiscal from Rs 8,903 crore in the previous year.

The total portfolio of flexible workspace operators has increased to 12.66 lakh from 10.4 lakh in 2022-23. In terms of area, the portfolio has risen to 57 lakh square feet from 47 lakh square feet.

Upflex data showed that the average price per seat per month has increased to Rs 10,400 from Rs 9,200 per desk. The occupancy level has increased to 90% from 75%.

The report was released by WeWork India CEO Karan Virwani.

"The past couple of years have been transformative for India’s commercial real estate, and flex spaces have played a pivotal role in this monumental shift. The modern workforce is becoming increasingly mobile, largely due to the adoption of hybrid work models and is fuelling a growing demand for flexible workspaces," Virwani said.

Upflex India CEO Pratyush Pandey highlighted that there were around 400+ operators with 1,500+ locations in about 55 cities pre-COVID pandemic.

Now, there are about 965+ operators in about 2,320 locations in about 90 cities, he added.

"As we navigate the evolving landscape of work, the paradigm shift towards flexible workspaces in India is indeed promising. The post-pandemic era has underscored the resilience of our workforce and the imperative for adaptable work environments," Pandey said.

The market size is growing because of high demand for hybrid working from corporates and large enterprises, he said.

"Corporates are consciously not investing into large spaces on their own as they now find it more convenient reaching out to managed office solution providers, enabling them to save on costs and increase flexibility," Pandey said.

As of June 2023, the co-working sector's share of overall commercial office leasing was 19%, Upflex said, adding that the number would reach 25-27% by the end of this fiscal.

This exponential growth is not only seen in the metros but spilling over to Tier 2 and 3 cities as well, the report said.