Flex office operators to ramp up expansion, deepen tier 2 presence this year

Bengaluru: Flexible workspace providers plan to expand their footprint in top cities and enter new tier 2 markets this year, as demand from homegrown and global firms for modern office solutions grows. 

WeWork India, Awfis, Indiqube, IWG, 315Work Avenue among others, that offer co-working spaces and managed offices, or customized workspaces, are looking at opportunistic ways to expand as more organizations opt for hybrid work. 

Leading operators IndiQube and WeWork India both plan to add 1.5 million sq ft of workspace each in 2024-25.

Managed office provider IndiQube said it will take up new space and expand in new micro-markets in the cities it operates in, and add more smaller cities to its portfolio. 

The Bengaluru-based firm has around 7 million sq ft of space under management, across 13 cities. It entered Vijayawada and Kochi last year, and is exploring an entry into Guwahati, Kolkata and Bhubaneshwar going forward. 

“FY24 had its challenges, with startups not doing well along with a funding slump, and a hiring freeze in the IT sector. We expect demand to be better this year, and are aiming at a 50% jump in our FY25 revenue,” said Rishi Das, co-founder and chairman of IndiQube. 

WeWork India is looking to add 18 more buildings, across 1.5 million sq ft, this year. It plans to include more managed offices as well, said CEO Karan Virwani.

WeWork India’s member base grew 18% in the last one year, and its average occupancy stands at 82%. It has over 90,000 desks, across 8 million sq ft, in seven cities. 

“We are scheduled to open our first building in Chennai, in early June, and will continue to strengthen our presence across the seven cities we are already operational in. We will continue to invest in our digital products, strengthening our position as a full-stack flex space operator,” Virwani said.

Also Read: IPOs by flexible workspace firms: Sharing to grow

The share of flex workspaces in the overall commercial office market is only growing. From 7% in 2023, the share is expected to scale up to around 12% by 2028, as per investment banking firm Avendus Capital’s estimates.

315Work Avenue, which manages 2 million sq ft space in Bengaluru, Chennai, Mumbai and Pune, plans to double its portfolio in 18 months. 

It is in advanced discussions to expand its footprint to Delhi-National Capital Region and Hyderabad, a company spokesperson said. 

Similarly, International Workplace Group (IWG), which operates brands such as Spaces and Regus in India, is eyeing a wider network in the country and plans to enter newer cities. 

“We are the only global player which is present in smaller cities, where we have got good response from local and larger companies. We want to add more new cities like Bhopal, Trivandrum and Kochi. The demand for organized, flexible workspaces is going up in such cities and we want to launch at a fast pace,” said Harsh Lambah, country manager India and vice-president sales - south Asia, IWG. 

IWG recently signed an agreement with HQ, a US-based brand, to open centres in India. It opened two centres under HQ in Bengaluru, and plans to open more in tier 2 and 3 cities, as well as suburban areas in large cities. 

As these companies mature and move into the next phase of growth, they are expected to raise institutional funding or look at public listings. 

Awfis Space Solutions Pvt. Ltd, which recently got the market regulator’s nod to launch an initial public offering, will use part of the funds to set up new centres. More companies are expected to draw up IPO plans in the next two years.