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The flexible office segment in the country is set for strong expansion, with the market expected to grow by more than 25 per cent CAGR by CY27E, unlocking an opportunity of nearly Rs 330 billion, highlighted a report by Ambit Capital.
According to the report, India's flex workspace market has emerged as a proxy play on traditional commercial real estate. The post-COVID shift towards hybrid work has played a key role in accelerating the adoption of flexible workspaces, especially among large enterprises. Flex leasing provides nearly 20 per cent cost savings for tenants compared to traditional leasing models, which has further driven demand. It stated "Flex segment is set to grow at >25 per cent CAGR by CY27E, implying an approx. Rs330bn opportunity". The report added that operators today offer a wide range of workspace solutions, from managed, campus-style offices to collaborative environments equipped with wellness features and hospitality-focused amenities. Managed workspaces, in particular, have witnessed rapid expansion, growing at 47 per cent CAGR since CY18, significantly outpacing the co-working segment, which grew at 16 per cent during the same period. The report noted that as the flex segment is expected to grow at more than 25 per cent CAGR by CY27E, it will continue to outpace the broader office market, which is likely to grow at only 6-7 per cent. Alongside this, many workspace operators are also entering related verticals such as furniture manufacturing, which is projected to become a Rs 190 billion market by CY29E. Flexible workspaces, once considered suitable mainly for freelancers and start-ups, have now become an integral part of the real estate strategies of large corporations and building owners. These spaces are fully furnished, serviced office solutions that offer adaptable terms for space, lease duration and location. The report highlighted that the sector has demonstrated strong resilience even after the COVID-19 pandemic. Large companies have increasingly shifted to flexible spaces due to advantages such as faster setup time, customizable leasing terms and lower upfront costs. This enterprise-level adoption remains the key driver behind the segment's strong growth trajectory. (ANI)
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