New Delhi, April 1 (IANS) The flexible office space market of India has witnessed a sharp surge over the past eight years, with annual transaction volumes rising 8.4 times from 2.2 million sq ft in 2017 to 18.6 million sq ft in 2025 across the top eight cities, a report showed on Wednesday.

The report by Knight Frank India highlighted that such growth indicated a compound annual growth rate (CAGR) of 30 per cent, significantly outpacing the broader office market, which grew at 9 per cent over the same period.

Flex space penetration has also increased sharply from 5 per cent in 2017 to 21 per cent in 2025, highlighting its rising importance in India’s office ecosystem, it said.

The report noted that flexible workspaces have evolved from being a startup-driven model to a core enterprise real estate strategy, with large corporates now dominating demand.

Large enterprises accounted for 72 per cent of total flex space absorption, far ahead of SMEs (18 per cent) and startups (10 per cent). Within this segment, global multinational corporations (MNCs) held 81 per cent of enterprise seats, underlining strong demand from global firms.

“India’s flexible workspace sector has moved well beyond its early positioning as a startup-led phenomenon to become a core component of enterprise real estate strategy,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

By end-use, Global Capability Centres (GCCs) led demand with a 52 per cent share, followed by third-party IT firms (26 per cent) and India-facing businesses (22 per cent), reflecting the growing role of flex spaces in supporting expansion and distributed workforce strategies.

At an industry level, the Information Technology (IT) sector remained the largest occupier with a 43 per cent share, followed by Banking, Financial Services and Insurance (BFSI) at 25 per cent, while other services and manufacturing sectors are steadily increasing their presence.

Among cities, Bengaluru remained the largest flex market, recording 5.3 million sq ft absorption in 2025, while Pune led in terms of penetration at 31 per cent.

The Mumbai Metropolitan Region and National Capital Region also saw strong growth, alongside emerging traction in Chennai and Hyderabad.

The report also highlighted that the next phase of growth will be driven by deeper enterprise integration, city-specific demand strategies and the evolution of flex operators into full-service workspace partners.

–IANS

ag/na