New Delhi, April 1 (NationPress) The flexible office space sector in India has experienced a remarkable growth trajectory over the last eight years, with annual transaction volumes soaring 8.4 times, increasing from 2.2 million sq ft in 2017 to 18.6 million sq ft in 2025 across the leading eight cities, as per a report released on Wednesday.

The report from Knight Frank India indicates that this expansion signifies a compound annual growth rate (CAGR) of 30 percent, which far exceeds the broader office market growth rate of 9 percent during the same timeframe.

The penetration of flex spaces has surged from 5 percent in 2017 to 21 percent in 2025, underscoring its growing significance in India's office landscape.

According to the report, flexible workspaces have transitioned from being a model primarily utilized by startups to a vital strategy for enterprise real estate, with large corporations now leading the demand.

In fact, large enterprises accounted for 72 percent of overall flex space absorption, significantly outpacing SMEs at 18 percent and startups at 10 percent. Notably, global multinational corporations (MNCs) occupied 81 percent of enterprise seats, demonstrating the robust demand from international firms.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, stated, "India’s flexible workspace sector has evolved from its initial startup-driven phase to become a central element of enterprise real estate strategies."

In terms of end-use, Global Capability Centres (GCCs) led the demand with a 52 percent share, followed by third-party IT firms at 26 percent and India-facing businesses at 22 percent, reflecting the increasing role of flex spaces in facilitating growth and supporting distributed workforce strategies.

At the industry level, the Information Technology (IT) sector remains the largest occupier, holding a 43 percent share, followed by Banking, Financial Services and Insurance (BFSI) at 25 percent, while other sectors like manufacturing are steadily increasing their footprint.

Bengaluru continues to be the largest flex market, reporting 5.3 million sq ft absorption in 2025, while Pune leads in penetration with 31 percent.

The Mumbai Metropolitan Region and National Capital Region also experienced significant growth, along with emerging interest in Chennai and Hyderabad.

The report emphasizes that the next phase of growth will be fueled by deeper enterprise integration, city-specific demand strategies, and the evolution of flex operators into comprehensive workspace partners.