Major flexible workspace and managed office space providers are planning aggressive expansion across India in 2024-25 to capitalize on rising demand. WeWork India, IndiQube, 315Work Avenue and IWG will add over 4 million square feet of new capacity primarily in tier 1 cities but also expand to tier 2/3 locations. They will enter newer cities like Guwahati, Kolkata, Bhubaneshwar, Delhi NCR and Hyderabad. The market share of flexi spaces is projected to grow from 7% to 12% by 2028, indicating strong potential for scale up.
Flexible workspace providers plan to expand their footprint in major cities and enter new tier 2 markets this year. Demand is growing from domestic and global companies for modern office solutions as more and more companies adopt hybrid work models.
Major players in the co-working and managed office space like WeWork India, Awfis, Indiqube, IWG, and 315Work Avenue see opportunities to expand. IndiQube and WeWork India plan to each add 1.5 million square feet of new workspace by 2024-25.
IndiQube, a managed office provider, will acquire new spaces and expand into micro-markets within existing cities. It will also enter more smaller cities to grow its portfolio beyond the current 13 cities. IndiQube entered Vijayawada and Kochi last year and is exploring Guwahati, Kolkata, and Bhubaneshwar.
WeWork India aims to add 18 new buildings with 1.5 million square feet this year. It will also grow its managed offices, said CEO Karan Virwani. Member numbers rose 18% in a year, with average occupancy at 82% across 8 million square feet in seven cities. It has over 90,000 desks across its centres.
315Work Avenue, with 2 million square feet across four cities - Bengaluru, Chennai, Mumbai and Pune - plans to double its portfolio in 18 months. It is in advanced discussions to expand its footprint to Delhi-National Capital Region and Hyderabad.
Similarly, International Workplace Group (IWG), which operates brands such as Spaces and Regus in India, is eyeing a wider network in the country and plans to enter newer cities like Bhopal, Trivandrum and Kochi. IWG recently signed an agreement with HQ, a US-based brand, to open centres in India. It opened two centres under HQ in Bengaluru, and plans to open more in tier 2 and 3 cities, as well as suburban areas in large cities.
Flex spaces' market share is projected to rise from an estimated 7% in 2023 to 12% by 2028, according to Avendus Capital. According to a report, India's flexible (flex) workspace market is projected to reach 126 million square feet (msf) by 2028, up from 61 msf in 2023. Around 250 flex workspace operators, with USD 3.5 billion in annual revenue in 2023, are estimated to generate revenues of USD 9 billion in five years.
As these companies mature and move into the next phase of growth, they are expected to raise institutional funding or look at public listings.
Awfis Space Solutions Pvt. Ltd, which recently got SEBI's nod to launch an initial public offering (IPO), will use part of the funds to set up new centres. More companies are expected to draw up IPO plans in the next two years.
With hybrid work becoming the norm, demand for flexible workspaces offering all-in-one solutions is set to rise significantly. Major players are well positioned to tap into this opportunity by expanding their presence nationwide. Their plans to add new locations, widen service offerings and raise capital will help accelerate growth. Some may also seek public listings to achieve the next phase of expansion over the next 2-3 years.
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