Indian office market to hit record high by 2025 as flex spaces drive growth: Gulam Zia, Knight Frank

The Indian office real estate market has emerged as a global outlier by 2025, delivering record leasing activity even as major global markets face weak demand. According to Gulam Zia, executive director of Knight Frank, flexible workplaces have become a key growth driver, accounting for almost a fifth of total office leasing this year.Speaking to ET Now, Zia said that office leasing in India will close well above 80 million sq ft in calendar year 2025, making it one of the strongest years on record. Flexible workspace alone is expected to account for around 20% of total gross rent, underscoring its increasing importance in occupier strategies.

Flex spaces are scaling up quickly

The number of flexible offices in India has increased significantly in recent years. The space occupied by flexible work operators has grown from around 34 million square meters in 2019 to almost 100 million square meters currently. Over the next two years, this figure is expected to exceed 144 million square meters, reflecting continued demand from both multinational and domestic occupiers.

Zia said this growth reflects deeper structural changes in the way companies use office space. “Flex is no longer a niche or stopgap solution. It has become an integral part of the corporate real estate strategy, especially for companies looking for scalability, speed to market and cost flexibility,” he said.

India defies global office slowdown

While the office markets in the US and Europe have been hit hard by remote work trends and economic uncertainty, India continues to outperform. Even other Asia-Pacific markets such as China, Singapore, Australia and Hong Kong have seen contraction or flat growth in office take-up.

“India clearly stands out,” Zia said. “Despite global headwinds, demand for offices here has grown spectacularly year on year, and this momentum is expected to continue.”

The GCCs and domestic demand are driving growth

Global Capability Centers (GCCs) remain a key driver of office demand, but Zia emphasized that local consumption and domestic companies are increasingly contributing to absorption. This diversification of demand helps protect the market against global volatility and is especially supportive for flex providers. “Demand is no longer just globally focused. Strong domestic growth is also supporting office leasing, which is a very healthy sign for the sector,” he noted.

Restrictions in supply promote flex expansion

On the supply side, Zia points out that many developers have shifted their focus from office projects in recent years, favoring residential construction, especially in the luxury segment, due to higher margins and faster sales.

“As residential properties became the low-hanging fruit, office development slowed. This supply-side constraint has indirectly supported flex spaces, which can quickly respond to occupier needs without waiting for large new offices to be completed,” he said.

The outlook remains strong

With continued demand, limited supply of new offices and India’s growing appeal as a global and domestic business hub, Knight Frank expects flexible workspace to continue to outperform the wider office market in the coming years.

“The foundations are firmly in place,” Zia said. “The office story in India – and especially the flex space segment – ​​remains one of the brightest spots in global commercial real estate.”