Banks and financial institutions have overtaken startups as the biggest new users of co-working spaces in India, doubling their flexible office footprint since 2023 and reshaping demand.
The banking, financial services and insurance (BFSI) sector has doubled its flexible office footprint since 2023 and now accounts for 10 percent of total demand, data from myHQ by Anarock’s Flex Office Market in India 2025 Report says.
It attributes the shift to managed office models that meet the sector’s compliance and security requirements.
The average number of flexible seats requested has risen to 53 in 2025 from 25 in 2023, a compound annual growth rate of 46 percent.
“Flexible workspace has moved from cost optimisation to a strategic essential,” myHQ by Anarock chief executive officer and co-founder Utkarsh Kawatra said.
Corporate deal sizes have risen from an average deal size of around 63,000 square feet in 2024, as organisations place greater value on speed, flexibility, and scalability in their real estate strategies.
“As India crosses 100 million square feet next year, we're building the infrastructure for how modern India will work and grow,” he said.
According to data from Cushman & Wakefield and Indiqube, the technology (IT and IT-enabled business process management) sector continues to lead flexible workspace leasing with around 48 percent share, followed by engineering and manufacturing at 17 percent, BFSI at 10 percent, and professional services at 6 percent.
BFSI push signals new phase
In India’s top nine cities, technology occupiers account for between 21 and 26 percent of flexible space absorption, BFSI for 19 percent, research and consulting for 10 percent, life sciences for 10 percent, and flexible workspace operators themselves for 18 to 23 percent.
The Cushman & Wakefield Q2 2025 India Office Market Report says BFSI firms accounted for 11 percent of gross leasing volume, while flexible space operators contributed 18 percent of overall leasing.
The JLL India Office Market Dynamics report said within the Global Capability Centres (GCCs) segment, BFSI and manufacturing together made up 55.6 percent of first-half leasing volumes, underscoring the scale of institutional participation.
This structural change signals a new phase for India’s office real estate. Large financial firms, which traditionally leased conventional office towers, are increasingly opting for flexible spaces to manage costs and adapt to hybrid work models, experts said.
What lies ahead
ICRA forecast supports the long-term trend, projecting that the share of flexible office supply in non-SEZ commercial stock will more than double to between 12.5 and 13.5 percent by FY2027, up from 5.3 percent in FY2020.
In absolute terms, India’s top six cities are expected to reach around 125 million square feet of flexible or co-working offices by March 2027, compared to about 80 million square feet in December 2024.
Beyond BFSI, the report said the enterprise client segment now represents 54.1 percent of the market by value.
Corporate and multinational tenants account for over a third of total flexible workspace adoption, nearly matching the share of startups but generating higher revenue because of larger ticket sizes and longer tenures.
“The flexible office sector has transitioned from alternative to essential,” Kawatra said. “With corporates, startups, and Global Capability Centres all accelerating adoption, we expect sustained double-digit growth. Flexible workspaces are redefining the future of work in India—driving not just cost efficiency, but resilience, innovation, and inclusivity.”
While startups continue to use coworking for early-stage agility, the entry of banks and insurance companies is redefining the sector’s economics. A BFSI lease can yield up to five to ten times the annual revenue of multiple startup clients combined, industry data indicates.
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