Flexible office space operators have received $820 million worth private equity funding since 2017 driven by rising demand from corporates, according to Knight Frank.
In its report released on Wednesday, real estate consultant Knight Frank India said the Private Equity (PE) investments in India's flexible office space sector have fluctuated significantly.
"From 2017 to 2018, investments grew steadily from $25 million to $49 million, rising sharply to $113 million in 2019, driven by investors like CLSA Capital and Peak XV Partners."
However, investments fell to $11 million in 2020 and $6 million in 2021 due to Covid-19, it added.
"A resurgence occurred in 2022, reaching $595 million, supported by deals from Hillhouse Capital and Actis, but dropped sharply to $13 million. In 2024, one deal secured $8 million," the consultant said.
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The report noted that flex-space operators have taken on lease an estimated 52.9 million sq ft (msf) from 2017 to the first half in 2024, with a robust CAGR of 22 per cent.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, "India's dynamic commercial real estate market, the industry's resilience and forward momentum are undeniable.
"With GDP growth projections for FY 2025 reaffirming India as the fastest-growing major economy, the demand for innovative office spaces is soaring. Occupiers are now looking beyond basic amenities to focus on employee well-being, and flexible office space operators are well-positioned to meet these evolving demands," Baijal said.
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By embracing ESG principles and cutting-edge technology, he said the flexible space sector is not just keeping pace -- it's setting the agenda for the future of workspaces.
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