Market size for flexible office spaces in India to double by 2030: Anarock

Co-working spaces will be the top choice of industry professionals by the end of the decade

The market size of flexible office spaces will grow from 55 mn sq ft to 100-140 MSF by 2030, said a report on Thursday as demand for co-working facilities becomes the top choice of industry professionals.

As many as 54 per cent of Indian companies are opting for co-working spaces to reduce expenses, said real estate consultancy Anarock in the report called ‘Navigating Flex -- Indian Coworking Market Analysis in 2024" report. Offering employees more workspace choices, business continuity, productivity and market expansion were other reasons.

Two out of three industry professionals believe that by the end of this decade the demand for co-working spaces will overtake that for traditional office spaces.

"While it offers flexibility, economic viability and comfort to the workers, employers also stand to benefit from a wide presence across the geographies that enable them to acquire and retain talent from far-off places," said Anuj Puri, chairman of the Anarock group.

Co-working spaces in 2023 comprised nearly 18 per cent of the total new office supply in the leasing market in seven major Indian cities, according to data in the report.

"In terms of the new supply, 34 MSF of fresh co-working stock has been added since 2017 till date across the key coworking cities: Delhi, Mumbai, Gurugram, Bengaluru, Hyderabad, Pune and Noida," said Utkarsh Kawatra, senior director at myHQ, which is part of Anarock.

The co-working sector got Rs 1,400 crore in funding between 2015 and 2019. Funding grew more than threefold to Rs 4,600 crore between 2020 and 2023.

Rentals for flexi spaces are increasing in top five cities: Mumbai, Delhi, Gurugram, Noida and Bengaluru. Mumbai reported the highest rise, with average monthly rental per flexi space seat increasing 27 per cent in the last four years. The average rent per office seat was Rs 15,900 in FY24, compared to Rs 12,500 in FY20.

Mumbai was followed by Gurugram, where the per seat monthly rent increased by 19 per cent to Rs 10,100 in FY24 from Rs 8,500 in FY20. Delhi’s flex workspace per seat rental growth was 18 per cent, from Rs 10,000 monthly in FY20 to Rs 11,800 per month in FY24.

 Bengaluru’s average monthly rent for flexi spaces was Rs 7,800 per seat in FY20 and increased by 15 per cent to Rs 9,000 per seat in FY24. In Noida, rent increased by 14 per cent: From Rs 6,500 per seat in FY20 to Rs 7,400 per seat in FY24.