Flexible workspace sector sees steady growth on multi-city deals, rising demand – Delhi News Daily

ET Intelligence Group: The four listed companies in the flexible workspace sector including WeWork India Management, Smartworks Coworking Spaces, IndiQube Spaces and Awfis Space Solutions reported double-digit revenue growth and margin expansion in the December quarter, supported by sustained enterprise demand. High occupancies across portfolios, a rising share of long-tenure, multi-city deals and improving cost efficiencies are expected to drive future growth. Over the next 12-24 months, margins are expected to widen further as a larger proportion of centres cross maturity thresholds.

Across companies, a structural shift can be seen. Large corporations and global capability centers (GCCs) are moving away from conventional office leases towards plug-and-play, multi-city flexible workplaces formats.

Also, earlier the demand was concentrated in the IT sector, which has now broadened across banking, financial services and insurance (BFSI), global tech, electronics, automotive, pharma, manufacturing, logistics and healthcare.

According to WeWork India, even in a rising-rent environment, flex operators benefit because they can lock supply early, allowing them to maintain pricing power. As more centres move past the maturity mark, operating leverage will be a major profit driver.

Smartworks stated the business is structurally positioned for margin expansion because occupancy gains have a direct flow-through effect in a fixed-cost model.

WeWork India’s occupancy rates have risen to 84%, with mature-centre utilisation close to 87%, supported by a sharp uptick in sales velocity and faster fill-up of new centres. The company stated that the platform now has visibility for 95% of its expansion for the next financial year, with leases taking its total planned footprint to 11.4 million square feet over the next 18-24 months.

Smartworks mentioned a similar expansion of demand, noting that enterprise clients accounted for nearly 90% of its portfolio with multi-city contracts becoming a key factor. Mature centres achieved 93% committed occupancy. New centres are stabilising faster than before, helping lift overall occupancy to 84% despite ongoing supply additions. It has secured supply visibility through FY27, supported by accelerating large-deal closures from GCCs and non-IT sectors such as BFSI, manufacturing, healthcare.

IndiQube’s occupancy was 84%, which rose from 81% last year, but declined sequentially from 87% due to new additions. It expects to reduce energy costs by operationalising a 20 megawatt solar plant in Karnataka and another 4 MW to be operationalised in Maharashtra.

Awfis reported 62% of signed supply under managed aggregation (MA) model, where the landlord bears the capital expenditure and lease obligations while the company aggregates, manages, and operates the facility. The company’s blended occupancy of 75%, though less than peers, has increased from 73% a year ago with vintage centres occupancy reaching 84%.

With deeper enterprise adoption and expanding multi-city deals, the flexible workspace sector is moving into the next phase of growth as maturing centres and pre-committed pipelines are reducing occupancy risk, making the model stable.