Year-ender: Flex spaces emerge as real estate of the future with scale-up, listings

Observers and analysts say that the asset light model of flex space operators are being scaled up to meet enterprise needs

• Managed and flexible office spaces led commercial real estate growth in 2025
• Flex space operators team up with REITs and developers for prime locations.
• Flex spaces to hit 100M sq ft, 20% of office leasing in India

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Managed and flexible office spaces emerged as the big winner of 2025 in commercial real estate, with three major listings- WeWork India, Indiqube, and Smartworks- and continued scaling up in terms of leasing in the overall commercial leasing activity, as well as the quality of product being offered.

Observers and industry players have also noted that flex space operators are increasingly working with institutional landlords such as REITs and major developers, in order to occupy marquee addresses and increase per-seat rates.

This has enabled large players, such as overseas firms setting up strategic facilities such as global capability centres (GCCs) to view flex space operators as a viable platform to enter the market, and expand with scale as they require in the future.

"Flex is the new operating system for commercial real estate. It answers what enterprises have been signalling for years: agility and capital efficiency matter more than asset ownership. At Smartworks, 2025 validated this shift. From leasing Eastbridge—the largest managed office campus globally—to enabling complex GCC expansions, we saw demand mature rapidly. Whether for hub-and-spoke setups or headquarters consolidation, large occupiers are moving to campus-style flex as their primary strategy," said Harsh Binani, co-founder of Smartworks.

A report from real estate consultants Colliers shows that the total stock of flex spaces in India is expected to cross 100 million square feet in the top seven markets of India. Flex operators are expected to take up nearly 20 percent of total office leasing in India for 2025, the report added. Flex and managed space players may also look towards secondary business districts in Tier-I markets, as well as major Tier-II cities, for expansion.

“The Colliers report clearly validates the seismic shift underway in India’s office market, a shift where flex has moved from the periphery to the center of occupier strategy. With flex penetration set to cross 10 percent and enterprise demand at an all-time high, the industry is entering a defining phase of maturity and consolidation," Amit Ramani, chairman & managing director, Awfis Space Solutions, India's first major flex space player to be listed on public markets.

The asset-light model of the flex space players has also been observed- and appreciated- by public markets. In a recent report, Ambit Capital said that flex spaces are the next growth frontier in commercial real estate, with flex leasing offering upto 20 percent in terms of cost savings for clients, compared to traditional leasing.

Ambit noted that the flex segment can grow by more than 25 percent annually by 2027, implying a Rs 33,000 crore opportunity, outpacing commercial real estate's growth of around 6-7 percent per annum. It recommeded "buy" calls for all of three major listed flex space players- Smartworks, Indiqube, and Awfis.

The models of various flex space players differ slightly in terms of fitout risks and revenue arrangements, with players such as the UK-based International Workplace Group, which has a large footprint in India through brands such as Regus, completely avoiding leasing and fitout risks. Instead, it works with landlords to bring up the property to international standards, and takes a pre-agreed management fee from the property owner, similar to major premium and luxury hotels.