5 Game-Changing Workspace Trends in 2024: A Peek into the Future

In 2023, India witnessed an exceptional rise in the demand for flexible and managed office spaces. Despite global uncertainties and fragile business conditions, India remained in the international spotlight for economic growth and business resilience. IT/ITes, Engineering & manufacturing, and BFSI remained at the forefront, embracing the concept of flexible work setups that provide versatility in lease duration, scalability, and amenities. From high-growth startups to MSMEs and large offshore and domestic enterprises, the appeal of flexible and managed workspaces lies in their ability to adapt to ever-evolving needs without the constraints of long-term leases or hefty infrastructure investments.  

Driven by multiple factors, the demand for Grade-A offices continues to surge as GCCs and domestic enterprises have shifted from traditional to advanced workspace solutions. According to a report from Colliers, GCCs are estimated to lease 45-50 million square feet of Grade-A office space in India by 2025. Moving ahead, we will present an in-depth analysis of five game-changing trends that are shaping the Indian CRE (Commercial Real Estate) market.

1. Economic Stability Meets Technological Supremacy    

One of the most significant trends in 2024 that will further transform the Indian CRE market is its growing economy. Compared to other major APAC and global economies, the Indian economy is growing at a rapid rate. The report from Cushman & Wakefield suggests that our economy is expected to grow at 6-7% levels during 2024-25 with a minimal impact from ongoing global uncertainties.   

 Also Read: 4 Top Trends Shaping the ROI of Smart Workspace

In addition, the IT industry witnessed a staggering 3X rise between 2010 and 2023 and is anticipated to reach a value of USD 500 billion by 2030. Apparently, they are not only the major employment contributors but also emerged as the leading occupiers of flex and managed office spaces across major cities such as Delhi-NCR, Mumbai, Bangalore, Hyderabad, and Pune.

2.Return-to-Office Continues to Gain a Momentum 

With a blend of remote and in-office work setups, companies are pressing forward to implement return-to-office strategies successfully. Pure-play managed and flex space players like Smartworks and others are at the front to support businesses with hybrid and hub-and-spoke models. As of November 2023, the average workspace occupancy rate has increased to 70%, compared to 40-50% at the end of 2022. 
 
Considering the shift in the trend, the hybrid work model has emerged as a win-win for both employers and employees. As a result, tier-2 cities have emerged as prime locations for operators as organisations are looking to grab this opportunity for flexibility, expansion, and talent attraction/retention at the same time.

3. Demand Forecast Signals Resilient Growth 

In 2024, office space leasing will continue to sustain across all markets. The previous year experienced a historical rise of 74.7 million square feet, surpassing the record of 2022. GCCs (Global Capability Centers) will continue to dominate the demand for Grade-A office space in cities like Bangalore, followed by Delhi-NCR, Mumbai, and Pune. The current trend suggests that flex space operators are exceptionally optimistic, with plans to expand their portfolios in the next two years to address the demand in both Tier-1 and Tier-2 cities. 

 
Another industry report from CBRE revealed that Tier-2 cities have emerged as a new ground for flex space operators as both GCCs and domestic enterprises. Cities like Jaipur, Kochi, Coimbatore, Ahmedabad, Indore, and others have become ideal destinations for businesses to expand their horizons. Driven by cost-effectiveness, presence of a skilled workforce, market potential, infrastructural development emphasis on flexibility, and employee satisfaction.

4. Robust Supply Pipeline Solidifying the Supply Chain in 2024

A robust supply pipeline is another workspace trend that will continue to shape India’s commercial real estate sector. Many core markets, including Guindy in Chennai, Cybercity & NH-8 Prime in Gurugram, Malad-Goregaon in Mumbai, Madhapur in Hyderabad, and Viman Nagar in Pune, have limited upcoming supply over the next 24 months to keep up with the increased varied demand. 

Also Read: The Future of Work: Glimpse of Workspace Transformative Trends in 2024

With over 120 million square feet of projects expected to be completed between 2024 and 25, occupiers will have plenty of space options, and the leasing conditions are anticipated to remain tenant-favorable in 2024.

5. Flex Momentum & ESG Compliance

The surging demand for flex spaces is not surprising as it has become a strategic necessity for occupiers to implement hybrid and hub-and-spoke models. With more focus on CAPEX savings, prime location, and employee well-being, enterprises will continue to focus on advanced workplace solutions rather than traditional ones. 
 
Moreover, the rise of ESG (Environmental, Social, and Governance) in corporate settings has become a priority for both operators and occupiers. As we move ahead, the new normal will prompt CRE leaders and pure-play managed office space providers to redefine strategies related to ESG and flexible work environments to implement return-to-work.

In conclusion, the forecasted workspace trends for 2024 offer a compelling glimpse into the future of work environments. As technology evolves and businesses adapt to new challenges, these five game-changing trends promise to reshape the way we approach workspaces.

The commercial office market witnessed robust performance, with GCCs and Indian firms anchoring growth. Additionally, cost-effectiveness, access to CBDs & SBDs, and a range of top-notch amenities have grabbed the attention of both offshore and domestic enterprises to switch from traditional to advanced workspace solutions. Hence, 2024 is likely to be a turning point in the Indian office market powered by favorable business conditions, accelerated economic growth, and renewed optimism.