Flex operators have expanded their footprint significantly in recent years to capitalize on economies of scale and meet the growing demand for flexible office spaces. As a result, this expansion is reflected in the average transaction size, which nearly doubled to 36,590 sq ft in H1 2024 from 2015 levels. Additionally, it marks a 13% increase compared to H1 2023, although it has not yet reached the peak observed in 2020.
| Year | Average Transaction Size (sq ft) |
| 2015 | 17,357 |
| 2016 | 19,845 |
| 2017 | 25,336 |
| 2018 | 34,417 |
| 2019 | 25,626 |
| 2020 | 51,004 |
| 2021 | 34,053 |
| 2022 | 36,736 |
| 2023 | 31,014 |
| H1 2024 | 36,590 |
Note: The above data is of office space taken up by flex operators for subleasing
Source: Vestian Research
Post-pandemic, average transaction size by flex operators increased across all cities except Mumbai. Mumbai saw a 46% decline, with the average transaction size dropping to 21,550 sq ft., On the other hand, Kolkata and Pune witnessed an increase of 238% and 219% respectively in average transaction size for the same period. Hyderabad recorded the highest average transaction size of 53,210 sq ft in the post-pandemic period, which has increased by 55% compared to the pre-pandemic period (2015-2019).
Flex stock is anticipated to cross the 100 Mn sq ft mark by the end of 2026
Flex market witnessed a demand shift post-pandemic from start-ups and SMEs to large conglomerates owing to flexibility and cost advantages. This led to significant growth which further contributed to the addition of 27 Mn sq ft of flex space to the total stock between 2020 and 2023 to cater to the growing demand. Moreover, around 10 Mn sq ft of flex stock was added in 2023 alone. Following this growth trajectory, total flex stock reached 67 Mn sq ft by the end of H1 2024, registering an annual increase of 25%. However, flex space still accounts for only 7.5% of the total grade-A office stock spread across the country. As office market continues to expand rapidly, flex stock is anticipated to cross the 100 Mn sq ft mark by the end of 2026, accounting for 20% of the pan-India office stock.
| Years | Flexible space absorption (Mn sq ft) | % share in pan-India absorption |
| 2016 | 1.1 | 2% |
| 2017 | 2.2 | 5% |
| 2018 | 4.8 | 10% |
| 2019 | 6.8 | 14% |
| 2020 | 3.5 | 9% |
| 2021 | 4.9 | 12% |
| 2022 | 8.4 | 16% |
| 2023 | 10.4 | 17% |
| 2024 (F) | 10.5 | 17% |
| 2025 (F) | 12.3 | 19% |
| 2026 (F) | 13.5 | 20% |
Note: The above data is of office space taken up by flex operators for subleasing
Source: Vestian Research
Shrinivas Rao, FRICS, CEO, Vestian said, “Indian flex operators are geared up to fulfill the requirements of large conglomerates. They have added 1.84 lakh seats within a year, reaching close to 1 Mn as of H1 2024. Also, around 48% of the pan-India flex stock is green-certified and 78% is in grade-A buildings to cater to environmentally conscious large MNCs. Significant cost advantages, robust economic growth, urbanization, and stable demand from IT-ITeS companies and start-ups are the major demand drivers for flex spaces in the country.”
Flex operators’ financials strengthen, heading towards profitability
Increased demand for flex spaces has led to strengthened financials. As a result, flex operators are able to negotiate favourable terms with fund houses and banks amid robust revenue streams. With strong revenue streams and ample funds, profitability is on the horizon as demand for flexible workspaces continues to remain high.
Mr. Rao further added, “Flex operators not only grew in number but also expanded geographically. While tier-1 cities are major markets for flex operators, tier-2 cities such as Ahmedabad, Jaipur, Kochi, Lucknow, and Chandigarh are also gaining traction on the back of improved connectivity due to nationwide infrastructure developments, affordable office rentals, and ample availability of skilled workforce.”
About Vestian:
Vestian is an occupier-focused workplace solutions firm specializing in commercial, residential, industrial, retail and hospitality sectors. Headquartered at Chicago, Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East. Our core strength lies in providing customized innovative solutions that are aligned to the client’s business objectives. Our extensive service portfolio includes Investment & Consultancy Services, Transaction Advisory Services, Project Services, Retail Business Solutions and Integrated Facilities Management Services. Vestian is the only global workplace solutions organization to be certified in both quality management systems and environmental health & safety standards such as ISO 9001, ISO 14001, ISO 45001 and ISO 37001. For further information on the company, you can visit us at www.vestian.com