Flex workspaces emerge as India's biggest office occupier in Q2

New Delhi: Flexible workspace operators emerged as the biggest driver of office leasing in the April-June quarter, overtaking all other occupier categories to become the largest segment in India's office market.

According to CBRE, flex operators accounted for 27% of gross leasing in the second quarter, ahead of technology companies (21%) and the banking, financial services and insurance (BFSI) sector (13%). The office market recorded its highest-ever quarterly absorption at about 24.6 million sq ft.

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Delhi-NCR led the trend, recording its highest-ever quarterly flex leasing. Flexible workspace operators accounted for 45% of the region's 3.6 million sq ft of leasing in the quarter, more than three times the share of the next-largest occupier segment.

"Flex has stopped being a hedge and become a core strategy,” said Anshuman Magazine, chairman and CEO-India, South-East Asia, Middle East & North Africa at CBRE. “What we are seeing in Delhi-NCR and Pune this quarter isn't occupiers dipping a toe into flexible space but winning the largest, highest-profile transactions in the market outright.”

“That's a structural shift in how corporate India thinks about its real estate, and it's happening alongside record absorption by GCCs and traditional occupiers, not at their expense. India's office market is deepening on every front at once," he said.

Pune also posted a record quarter, with leasing touching 4.1 million sq ft, led by flex operators, which accounted for 38% of total absorption—the highest share among major cities during the quarter. Flexible workspace operators were also the second-largest occupier group in Bengaluru (26%) and Hyderabad (24%), underlining the segment's growing presence beyond its strongest markets.

"With the huge demand for flexible space, supply remains a challenge,” said Jai Agnani, chief growth officer, CG Offices. “Premium vacant land in Delhi's core corridors is virtually exhausted—the next wave of supply will come from redeveloping legacy buildings, unlocked by the extra FAR granted under the amendment to the Delhi Master Plan.”

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“Our workplace and portfolio services team just leased 20,000 sq ft in Saket to a leading healthcare major in a building that used this additional FAR to add new floors," Agnani said.

Listed managed workspace provider IndiQube recently leased 390,000 sq ft in Sector 142, Noida, for what will be its largest campus in the National Capital Region.

Flex operators continue to account for the largest share of leasing in Grade B buildings nationally, but are increasingly taking up investment-grade assets as well, in line with the broader flight-to-quality trend driven by green-certified buildings, ESG compliance and amenity-rich workplaces.

The broader demand momentum helped India's office market post a record 45.5 million sq ft of absorption in the first half of 2026, up 9.6% year-on-year, against supply of 32 million sq ft, also a first-half high. Global capability centres (GCCs) remained the largest occupier category overall, accounting for 42% of second-quarter absorption. However, the rise of flexible workspace operators points to a more diversified demand base.

CBRE expects flex adoption to accelerate through the rest of 2026 as operators compete more aggressively for high-quality, ESG-compliant assets in core micro-markets and the ‘core plus flex’ portfolio strategy gains wider acceptance.

"The demand across cities, asset classes and occupier types remains consistent,” said Ram Chandnani, managing director-leasing services, India at CBRE. “Occupiers are prioritising quality, sustainability and flexibility in equal measure, reflected in the scale-up of flex space adoption, the continued dominance of green-certified assets and record activity in markets like Delhi-NCR and Pune."