Small office occupiers in Mumbai, Bengaluru, and Gurugram face the steepest facilities management (FM) costs per sq ft among all major Indian office markets, according to a report released by Knight Frank India on Saturday, 16 May. The findings underscore a widening cost gap between compact office formats and large campuses, which benefit from scale efficiencies and integrated workplace infrastructure.

Key Findings on Cost Disparities

The Knight Frank India report identifies Mumbai, Bengaluru, and Gurugram as the highest-cost markets for small office occupiers, driven by premium Grade A office ecosystems, elevated workforce costs, and strong demand for integrated workplace management services. In contrast, Pune and Kolkata emerged as the most cost-efficient markets, with FM costs ranging between ₹21.13 and ₹24.55 per sq ft across operational formats.

Small office formats — which typically include startup hubs, boutique corporate offices, flex space occupiers, and regional business units — continue to face the highest FM costs across all major markets due to limited scale efficiencies and higher manpower intensity per sq ft.

Segment-Wise Cost Breakdown

Within the 10,000–30,000 sq ft category, FM costs in Mumbai, Bengaluru, and Gurugram stood at ₹25.52 per sq ft for 12-hour operations, rising to ₹27.52 per sq ft for 24x7 operations. Offices in the 30,000–50,000 sq ft category recorded the highest operational costs across all segments — ₹27.65 per sq ft for 12-hour operations and ₹29.65 per sq ft for round-the-clock operations.

Security costs for small offices remained comparatively elevated across gateway cities, averaging between ₹3.40 and ₹3.65 per sq ft, reflecting higher guard deployment ratios, visitor management requirements, and compliance-led workplace protocols.

Impact of Operating Format on FM Costs

The report highlights that operating formats play a significant role in determining total workplace management costs. 24x7 operations consistently command a premium over conventional 12-hour, 5-day models, owing to higher manpower deployment, engineering support requirements, and round-the-clock security obligations. This cost differential is most pronounced in gateway markets where base workforce costs are already elevated.

What Industry Leaders Said

Pawan Koyal, Executive Director and Head of Facility and Asset Management at Knight Frank India, noted that facilities management has evolved into a strategic business function as occupiers increasingly prioritise operational continuity, workplace experience, sustainability, and employee wellbeing.

'The analysis also reflects the premium associated with gateway office markets such as Mumbai, Bengaluru and Gurugram, where higher workforce costs and demand for sophisticated workplace management solutions continue to drive operational expenditure,' Koyal said.

Outlook for Office Occupiers

As hybrid work models mature and corporate real estate strategies shift toward optimising cost per employee rather than cost per sq ft, the pressure on small office occupiers in premium markets is unlikely to ease in the near term. Occupiers in these cities may increasingly evaluate flex space arrangements or consolidation into larger formats to capture scale benefits — a trend the report implicitly supports through its cost-efficiency data.