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CBRE South Asia's latest survey reveals significant shifts in India's office space landscape. The report highlights a growing adoption of flexible workspaces, with over 58% of companies expected to allocate more than 10% of office space to flexible arrangements by 2026, up from 42% in early 2024. Indian firms lead in embracing this trend compared to their American counterparts. Additionally, nearly 70% of companies plan to expand office space, focusing on decentralised operations across Tier-II and III cities for talent accessibility and cost efficiency. The survey underscores a renewed focus on sustainability and employee wellbeing in office design, signalling dynamic growth prospects across India.
CBRE South Asia's latest survey reveals a major shift in the Indian office space landscape. The report highlights a clear move towards flexible workspaces, strategic portfolio management, and a growing preference for Tier-II and III cities. Advertisement
The survey predicts a significant increase in the adoption of flexible workspaces. By 2 026, over half (58%) of companies are expected to dedicate more than 10% of their office space to these adaptable arrangements - a substantial jump from 42% in the first quarter of 2024. This trend reflects a growing need for flexible work environments that cater to hybrid work models and the evolving needs of businesses.
Interestingly, the survey suggests a difference in preference between domestic and international companies. Indian businesses appear to be more enthusiastic about flexible workspaces compared to their American counterparts. This 42% rise in flexible workspace adoption by Indian companies over two years could indicate a greater willingness to embrace new work models or a difference in work culture between the two regions.
The survey also reveals a focus on portfolio expansion, with nearly 70% of surveyed companies planning to increase their overall office space in the next two years. However, the strategy is shifting towards a decentralised approach. Companies are looking to spread their operations across multiple locations (with an average expansion of 10% or more planned by both domestic and global firms over the next two years) to tap into a wider talent pool and cater to geographically dispersed clients. This trend is expected to be particularly prominent in the BFSI (88% of firms planning to expand) and GCC sectors (67% planning expansion).
While hybrid work models remain prevalent, there's a growing emphasis on in-office presence. The survey indicates that 90% of respondents prefer being in the office for at least three days a week, with a significant portion favouring full-time office work. This suggests a potential move away from a purely remote-first approach, with companies recognizing the benefits of physical collaboration and team building.
The future of office design is likely to prioritise sustainability and employee wellbeing. The survey reveals that companies are looking for modern buildings with features like green certifications (67% of occupiers willing to allocate 5% or more of their project budget towards ESG implementation), energy-efficient HVAC systems, and fitness facilities. This focus reflects a growing understanding of the link between employee comfort, productivity, and environmental responsibility.
The survey also highlights a trend towards expansion in Tier-II and III cities. These cities offer a skilled workforce, with a talent pool that is particularly attractive to technology and BFSI firms. Competitive rental costs and developing infrastructure are also making these locations attractive options for businesses looking to expand beyond major metropolitan areas like Bangalore, Hyderabad, NCR, and Mumbai. Chennai and Pune are seeing a rise in both office leasing activity and new office space supply, making them particularly attractive destinations for expansion. This trend is likely to continue as technology and BFSI firms, along with domestic startups, explore the potential of these emerging markets.
CBRE's survey paints a picture of a dynamic Indian office market. Flexible workspaces are gaining ground, companies are strategically managing their portfolios with a focus on decentralisation, and there's a growing focus on sustainability and employee experience. With Tier-II and III cities gaining traction, India's office market is poised for exciting growth and a more balanced development across the country.
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