India’s Flex Space Market: FY23 Analysis ​

The Brightest Star in the CRE Galaxy: JLL- Smartworks Report​​​

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Coworking Space

The report predicts that India’s operational flex stock will reach 106 mn sq ft, doubling again over the next five years. The country’s operational flex stock has risen to 53 mn sq ft across the top seven cities, occupying around ~839,250 seats. This equates to an overall office stock penetration level of around 4.7%, making it among the fastest-growing flex markets globally.​

Coworking Space

The growth in the flex sector has been driven by pure-play managed operators offering customized space solutions, growing at a CAGR of 70% since 2018. The report, conducted by JLL and Smartworks, provides insights into the journey and performance of the flex sector in India's commercial office market and offers actionable insights for optimizing office portfolios.​

Key Highlights​

  • Pure-play managed space providers have been the drivers of the flex resurgence post-COVID, growing the fastest compared to the other players who offer either pure coworking spaces or hybrid spaces.​

  • Managed space operators have seen their operational footprint grow by 10 times to ~15 mn sq ft till March 2023 compared to the 2018 numbers. Both coworking and hybrid players have seen a decline in their respective shares of operational flex stock over the past two years.​

  • At a city level, Bengaluru is the overall leader in terms of operational flex stock, accounting for a ~39% share on average since 2018, followed by Delhi NCR with an average share of ~17%. Over the same period, Hyderabad and Pune have displaced Mumbai in terms of the next highest flex stock across the top 7 cities.​

  • There has been a diversification of demand which is now of a very secular nature with all occupier categories, including manufacturing/industrial, BFSI, and Consulting adopting flexible office formats to a greater extent

  • Space taken up by enterprises (converted to per seat basis) in flex has risen by 3.2X in the period of FY21 to FY23, to a record-high number. It is interesting to note that the enterprise seat take-up recorded in FY23 is higher compared to the combined FY21 & FY22 numbers.​

  • The flex industry’s growth numbers also find concurrence in the occupier survey conducted as part of this report. A sizeable 63% of all our respondents want flex as an adjunct to their overall portfolio – keeping conventional spaces but adding more flexibility in their portfolio.​

  • The flex story in smaller cities is gaining definite momentum. A significant 26% of respondents with their current operations limited to tier 1 cities have also shown that they are willing to explore tier 2 cities for their medium to long-term expansion plans. The tier 2 story is an evolving one and one to watch out for.​

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