India’s flexible space providers have reported a multifold surge in revenue since the pandemic as corporates joined startups and professionals in seeking alternative workspaces closer to employees instead of setting up large, traditional offices.
Awfis Space Solutions, a publicly listed co-working space provider, saw its revenue from operations jump nearly fourfold from ₹178 crore in FY21 to nearly ₹849 crore in FY24, according to the company’s IPO filings and annual report. WeWork India’s revenue more than doubled from ₹800 crore in FY22 to ₹1,800 crore in FY24, according to numbers disclosed by CEO Karan Virwani in separate interviews to CNBC TV18 and PTI. IPO-bound IndiQube’s top-line grew from nearly ₹298 crore in FY21 to ₹841 crore in FY24. Mispras Furnishings Private Ltd (Urban Vault) saw its revenue rise from ₹10 crore in FY21 to ₹78 crore in FY24.
Seeking flexibility
“After the pandemic, corporates wanted flexibility of space—like plug and play—so that they didn’t have to do the complete setup,” said Pankaj Kapoor, founder and managing director at Liases Foras Real Estate Rating and Research Pvt Ltd. He also turned to a co-working space to expand his office.
“If you didn’t require a bigger office or if your office was smaller than your requirement, these problems were solved by flex spaces,” Kapoor said. “The cost crisis that corporates were facing during the pandemic also led them to go for more efficient models like co-working spaces.”
The flexible office segment, comprising co-working and managed workplaces, has “relentlessly grown” over the last two years, with capacity additions of 8-9 million square feet (msf) each in 2022 and 2023, according to a Cushman and Wakefield report. Its footprint doubled in the last five years, accounting for 58 msf or 7-8% of the overall Grade-A office inventory in the first half of 2024.
Most alternative office space providers have been looking to capitalize on this demand and the booming stock market to go public. Awfis got listed on May 30, after raising nearly ₹600 crore in its initial public offering. Smartworks Coworking Spaces Ltd, WeWork India, Simpliwork Offices, IndiQube and Table Space Technologies Pvt Ltd are also gearing up for IPOs, Mint reported earlier.
Rising demand
For co-working and managed workplaces, demand is also being driven by global capability centres (GCCs) from sectors such as manufacturing, engineering and consulting, in addition to the traditional requirement from information technology services and business process management, said Ramita Arora, head of flex, India, and managing director, Bangalore, at Cushman and Wakefield.
A Knight Frank report said GCCs showed a renewed interest in flex spaces in 2024 as slower economic growth in the US prompted companies to leverage cost advantages and tap into India’s talent pool.
“Pre-covid, the demand used to come from startups, SMEs (small and medium enterprises), mid corporates and freelancers. After the pandemic, enterprises kind of latched on in a big way,” said Amit Ramani, chairman and managing director, Awfis. “Secondly, with the hybrid model of work, employees began demanding for workspaces close to their home.”
Which means from employees going where work is, workplaces began moving closer to them.
“This evolution has led to the emergence of distributed offices, with intra-city and inter-city centres enabling ‘walk to work’,” said Rishi Das, co-founder of IndiQube. “Also, the need for agile workspaces has become paramount, with zero capital expenditure and pay-as-you-use models taking center stage amid uncertainty about employees’ return-to-office plans.”
Amal Mishra, founder and chief executive of Urban Vault, a managed office space provider based in Bengaluru, said, “Commercial real estate growth and ‘back-to-office’ trend together have led to the boom in demand for flex office space.”
Expanding footprint
To meet this growing demand, Table Space plans to add 9 million sq ft to its portfolio over the next three years, expanding its presence to around 120 centres primarily across tier-1 cities, including Mumbai, Bengaluru, and Delhi-NCR, said Karan Chopra, vice-chairman & co-founder, Table Space. In the current fiscal year, the company is eyeing an overall revenue of ₹3000 crore, a 20-23% growth over the previous year.
Awfis Space Solutions has a guidance of about ₹140 crore expenditure to add 40,000 seats this financial year. Urban Vault is planning to spend ₹80-85 crore this year, with an annual turnover projection of ₹100 crore for FY25.