The size of India’s flexible office space market is projected to experience a substantial 60% increase, surpassing Rs 14,000 crore in FY24, according to a report titled ‘Co-Working and Managed Offices Redefining the Indian Commercial Real Estate‘ released by Upflex India. This surge is attributed to a rise in rental charges per desk and the expansion of portfolios by operators.
The report indicates that the annual coworking market size, measured by rental income, is expected to reach Rs 14,227 crore in FY24, a significant rise from Rs 8,903 crore in the previous fiscal year. The total portfolio of flexible workspace operators has expanded to 12.66 lakh in FY24 from 10.4 lakh in FY23, covering an area of 57 lakh square foot (sqft), up from 47 lakh sqft. Notably, the average price per seat per month has increased from Rs 9,200 in FY23 to Rs 10,400, while the occupancy level has surged from 75% to 90%.
Prior to the COVID-19 pandemic, there were over 400 operators with more than 1,500 locations in approximately 55 cities. Presently, the number of operators has exceeded 965, spanning around 2,320 locations across nearly 90 cities. The robust growth in market size is attributed to the heightened demand for hybrid working models among corporates and large enterprises.
As of June 2023, the co-working sector accounted for 19% of overall commercial office leasing, and Upflex predicts this share to reach 25-27% by the end of FY24. Interestingly, this growth is not confined to metropolitan areas alone but has extended to Tier-2 and 3 cities, marking a widespread impact on the flexible office space market.
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