AI adoption pushes India's C-suite toward flexible offices: IWG report
Synopsis
India's top executives are no longer willing to sign long-term office leases — and AI is the reason. An IWG report finds 60% of Indian CEOs and CFOs can't predict space needs two years out, while GCCs already drive nearly half of all new office leasing. The country with the world's highest workplace AI adoption is quietly rewriting the rules of corporate real estate.
Key Takeaways
60% of Indian CEOs and CFOs say AI has made it impossible to predict office space needs two years ahead, per an IWG report released 11 August 2025 .
73% of business leaders are less willing to commit to long-term leases due to rapid AI-led technological change.
99.8% of CEOs and CFOs are actively shifting real estate costs from fixed to variable spend.
India has the world's highest workplace AI adoption , with 73% of professionals regularly using AI tools.
GCCs accounted for 45.5% of gross office leasing in Q1 2026 and are projected to exceed 2,400 centres employing 2.8 million people by 2030 .
76% of CEOs believe the physical office will become more important over the next two years, not less.
Sixty per cent of CEOs and CFOs in India say the rapid rise of artificial intelligence (AI) has made it impossible to forecast office space requirements two years out, driving a decisive shift toward flexible, capital-light workspace models, according to a report released on Tuesday, 11 August 2025 by International Workplace Group (IWG). The findings signal a structural realignment in how Indian enterprises think about real estate — less as a fixed asset, more as a variable cost.
Key Findings from the IWG Report
The report found that 73 per cent of business leaders are now less willing to commit to long-term office leases, citing rapid technological change driven by AI-led transformation. An overwhelming 99.8 per cent of CEOs and CFOs said their organisations are actively shifting real estate costs from fixed to variable spend.
Simultaneously, 55 per cent of respondents said they are evaluating networks of workspace locations situated closer to where employees live — a model that reduces commute times and allows faster talent access across metro and Tier-2 cities. Notably, 88 per cent of CEOs said AI adoption had directly led their organisations to seek greater flexibility in workspace or real estate solutions.
The Office Is Not Dead — Just Different
Despite the pivot to flexibility, the report pushes back against narratives of office obsolescence. 76 per cent of CEOs believe the physical office will actually grow in importance over the next two years. The shift, leaders indicate, is not about abandoning office space but about replacing rigid, single-location commitments with scalable, distributed workplace networks.
This comes amid a broader global rethink of corporate real estate strategy, where long-term lease liabilities have become increasingly difficult to justify as workforce size and composition fluctuate with AI-driven productivity changes.
India's AI Adoption: A Global Leader
India's position at the centre of this transformation is underscored by a striking data point in the report: the country has the world's highest workplace AI adoption rate, with 73 per cent of professionals regularly using AI tools. That penetration rate is reshaping not just how work gets done, but where it gets done and how much space it requires.
Global Capability Centres (GCCs) operating in India are expected to surpass 2,400 by 2030, employing approximately 2.8 million people. Already, GCCs account for 45.5 per cent of gross office leasing in Q1 2026, making them the single largest customer segment for new office space in the country.
What Industry Leaders Said
Christian Schmitz, CEO of International Workplace Group, said: 'AI is accelerating the pace of change for every business, and companies that want to succeed need workplace strategies that allow them to scale up or down quickly, reduce unnecessary fixed costs and give their people access to high-quality workspace wherever they need it.'
Harsh Lambah, Country Head, IWG India, added: 'India is one of the clearest examples of how AI adoption, and changing workforce expectations are reshaping office demand...We're increasingly seeing companies build workplace networks across metro and Tier-2 cities so they can access talent, reduce commuting times and scale much more quickly.'
What Comes Next
As GCC expansion accelerates and AI continues to compress planning horizons, flexible workspace operators are positioned to be the primary beneficiaries of India's corporate real estate reset. Companies that delay adapting their real estate strategies risk being locked into costly, underutilised space as workforce and technology needs evolve faster than traditional lease cycles allow.
Point of View
Yet nearly three-quarters believe the office will matter more, not less. That tension is the real story. India's GCC boom is masking a structural fragility — when 45.5% of office leasing is driven by a single segment whose headcount projections are themselves AI-dependent, any recalibration in GCC hiring could ripple hard through commercial real estate. The shift to flexible leases is rational risk management, but it also transfers pricing power from landlords to operators like IWG — whose incentive to publish bullish AI-and-offices data is worth noting. Readers should treat the 99.8% figure with scrutiny; survey self-selection in corporate reports of this kind tends to skew toward respondents already invested in the trend.
NationPress
11 Aug 2026
Frequently Asked Questions
What did the IWG report find about AI and office space in India?
The IWG report found that 60% of Indian CEOs and CFOs say the rise of AI has made it impossible to predict office space requirements two years out. This uncertainty is driving a broad shift toward flexible, capital-light workspace models over traditional long-term leases.
Why are Indian companies moving away from long-term office leases?
73% of business leaders surveyed said rapid AI-led technological change has made them less willing to commit to long-term leases. As AI reshapes workforce size and composition faster than traditional lease cycles allow, companies are opting for scalable, distributed workplace networks instead.
What role are Global Capability Centres playing in India's office market?
GCCs are the largest driver of new office demand in India, accounting for 45.5% of gross office leasing in Q1 2026. They are projected to exceed 2,400 centres by 2030, employing around 2.8 million people, making them central to the country's commercial real estate trajectory.
Does the IWG report suggest the physical office is becoming obsolete?
No. The report found that 76% of CEOs believe the office will become more important over the next two years, not less. The shift is toward flexible, scalable office networks rather than abandoning physical workspaces altogether.
How does India compare globally on workplace AI adoption?
India leads the world in workplace AI adoption, with 73% of professionals regularly using AI tools, according to the IWG report. This high adoption rate is a primary driver of the uncertainty around future office space needs among Indian business leaders.
