Top IT and ITeS companies are realigning workspaces for flexibility, innovation, and sustainability, doubling flexible space in portfolios to 10-15% in 2024, surpassing 50 million square feet. This trend, driven by increasing demand from domestic and global enterprises, is expected to grow in 2025. Companies are leveraging data analytics and AI to optimise real estate strategies and exploring CRE partner models. The sector is experiencing significant changes, with an increase in outsourcing and a hybrid work model. Experts highlight the importance of transforming office spaces to enhance employee engagement, innovation, and sustainability, with substantial demand from technology firms.
Top IT and IT-enabled services (ITeS) companies are reorganising their workspaces to prioritise flexibility, innovation, diversification, and sustainability. This strategic shift has led to a doubling of flexible space within their real estate portfolios, reaching 10-15% by 2024. In terms of area, flexible space now exceeds 50 million square feet, representing approximately 7% of total Grade A stock as of the second quarter of 2024. This trend is anticipated to gain further momentum in 2025.
Arpit Mehrotra, Managing Director of Office Services at Colliers India, highlighted the increasing demand for flexible workspaces, driven by both domestic and global enterprises across various sectors. This shift towards adaptable workspaces reflects a broader trend within the industry, as companies align their real estate strategies to enhance resilience and adapt to evolving organisational needs. According to a recent report by Colliers, the majority of commercial real estate (CRE) leaders globally plan to either reduce or maintain their office space by 2026, indicating a significant move towards flexibility and real estate optimisation.
Companies are increasingly utilising data analytics and artificial intelligence to reshape their real estate strategies, optimise resource allocation, and enhance operational performance. Additionally, various corporate real estate (CRE) partner models are being explored for real estate and facilities management to improve service delivery and operational flexibility.
Sameer Saxena, founder of the Global Association of Corporate Services which represents over 10,000 real estate professionals, noted that the corporate real estate sector is undergoing significant changes, with an expected increase in outsourcing reflecting a growing reliance on external expertise to boost internal capabilities and efficiency. He remarked that office spaces are being utilised as collaborative environments, and various teams are following a hybrid working model with dedicated anchor days.
Industry experts emphasise that transforming office spaces involves creating environments that engage employees, foster innovation, and support organisational missions. There is also a significant push to upgrade older real estate assets to meet sustainability commitments, reduce carbon emissions, and comply with new regulations.
Nalin Gagrani, Chairman and Managing Director of Blue Pebble Ltd, mentioned that improving the physical workspace directly impacts employee satisfaction and strengthens brand identity. He explained that the designs are intended not just for visual appeal but to foster creativity, collaboration, and well-being, making workspaces more attractive to top talent. Gagrani also noted that as the demand for flexible and responsive workspaces grows, their expertise in environmental branding becomes increasingly important.
Experts further indicate that Indian technology firms, which serve as back offices for banking and financial services, are continuing to operate under a hybrid work model. This model involves 30% to 50% of staff working from the office on a rotational basis. Consequently, corporations are reassessing their work strategies, adopting more managed space models, and placing greater emphasis on flexibility in workspace design.
In the first half of 2024, the Indian office market witnessed diverse demands, resulting in a total absorption of 32.8 million square feet. Each region exhibited distinct trends, with the IT/ITeS segment experiencing a robust resurgence. Cities such as Bangalore, Delhi-NCR, and Chennai saw significant demand from technology companies, largely driven by Global Capability Centres (GCCs). This resurgence highlights the evolving dynamics of the office space market in India, driven by the need for adaptability and innovation.
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