ICRA projects India’s flexible/co-working office supply in the top six cities to grow at a 21-22% CAGR, reaching 125 million sq ft by March 2027, driven by enterprise clients, startups, and domestic corporates.
The flexible /co-working office supply will increase at a CAGR of 21-22% during FY2025-FY2027 and reach ~125 million square feet by March 2027 from ~80 million sq ft as of December 2024 for the top six cities including Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR) and Pune, said rating firm ICRA.
Leasing activity remained strong for flex workspaces with absorption of ~13 million sq ft against supply of ~14 million sq ft in FY2024, supported by healthy demand from enterprise clients, start-ups and domestic corporates, the rating firm said , adding this trend reduced the vacancy levels by 300 bps to 17% as of March 2024 from 20% as of March 2023.
Despite the influx of a huge supply of 17-19 million sq ft in the flex workspace each from FY2025 to FY2027, ICRA expects vacancies to remain range-bound at 16.5-17% by March 2025 and improve to 15.5-16.5% by March 2026 and March 2027, it said