Real Estate Leasing Surge: Flex Spaces Account for 21% of Office Leasing in Q1 2026
India’s office market continued its strong momentum in the first quarter of 2026, despite global uncertainties. This robust performance is primarily driven by robust occupier demand, the expansion of global capability centres (GCCs), and the increasing adoption of flexible workspaces.
According to real estate consultant Colliers, flex space leasing surged 77% year-on-year to 3.9 million sq ft in Q1 2026. This increase has taken the share of flex spaces in overall office leasing to 21%, up from 14% in the year-ago period.
Overall office leasing across the top seven cities stood at 18.3 million sq ft during the quarter, marking a 15% annual increase. This growth reflects the strong demand for office spaces, particularly from enterprises and GCCs, which are increasingly seeking ready-to-move, managed office environments.
Why Flex Spaces Are Growing
The report highlights that occupiers are increasingly adding flex spaces to their portfolios for several reasons, including scalability, cost efficiency, risk mitigation, and hybrid work enablement. Demand has been particularly strong from enterprises and GCCs, which are looking for managed office environments that can adapt to their evolving needs.
Market Outlook for 2026
Colliers projects that flex spaces will account for 20-25% of total office leasing in 2026, with annual absorption projected at 15-18 million sq ft. This is a significant increase from the 13 million sq ft take-up and 18% share in 2025. The consultancy also expects India’s total flex stock to reach 85-90 million sq ft by the end of 2026 and cross 100 million sq ft in 2027.
Smartworks Crosses 10 Million Sq Ft
Managed office platform Smartworks recently announced that it has crossed 10 million sq ft of operational portfolio, becoming the first listed flexible workspace provider in India to reach this milestone. Neetish Sarda, founder and Managing Director of Smartworks, attributes this achievement to a structural shift in India’s office market.
“This milestone reflects the structural shift underway in India’s office market, where enterprise demand is moving towards managed, campus-led solutions that offer scale, consistency, and long-term visibility. As an infrastructure partner to enterprises and GCCs, we enable multi-city expansion with standardised delivery, predictable execution, and consistency of experience. Achieving this level of operational scale is about the quality of growth anchored in long-tenure enterprise relationships, strong occupancy, and increasing revenue visibility—positioning the business for sustained, compounding growth,” Sarda said.
Industry Expert Opinions
James Thomas, co-founder and director (marketing) at SpazeOne, noted that the office market momentum in Q1 2026 reflects a deeper structural shift in how businesses are approaching workspace strategy.
“The growth in leasing underscores sustained demand driven by enterprise expansion, GCC activity, and the growing preference for flexible, scalable solutions. This trend reinforces the relevance of managed and coworking spaces, as companies prioritize efficiency, cost optimization, and employee-centric environments in an evolving business landscape,” Thomas added.
Shesh Rao Paplikar, founder and CEO of BHIVE Workspace, emphasized that enterprises and GCCs are no longer just leasing space but are increasingly seeking managed environments where teams can be productive from day one.
“Enterprises and GCCs are no longer just leasing space; they want managed, ready-to-operate environments where their teams can be productive from Day 1. Flexible workspace providers who offer scale, quality, and community will define the next decade of India’s commercial real estate growth,” Paplikar added.
Ashish Sharma, AVP operations at Brahma Group, highlighted the rising demand for high-quality, future-ready office spaces with strong sustainability and location advantages.
“This growth is being driven by expansion across technology, flexible workspaces, and Global Capability Centers. As a developer, we see this as a reaffirmation of the demand for high-quality, future-ready office spaces. It also underscores the importance of innovation, sustainability, and strategic location in shaping the next phase of India’s commercial real estate growth story,” Sharma added.
Manas Mehrotra, founder of 315Work Avenue, emphasized the role of coworking spaces in reshaping India’s commercial real estate landscape.
“Coworking spaces are becoming a major force in reshaping India’s commercial real estate landscape. As organizations seek to create dynamic, future-ready workplaces, investing in high-quality, well-designed office spaces has emerged as a strategic imperative. Contemporary spaces with ergonomic layout, abundant natural light, and designated spaces for teamwork promote innovation, enhance employee satisfaction, and raise overall productivity. As these industries scale operations, attract global mandates, and drive innovation, they are increasingly opting for agile, future-ready work environments that offer scalability, cost-efficiency, and access to talent. Flexible space is no longer a cutting-edge trend; it is now the core of business strategy. With the shift towards hybrid work models and employee-centric workplaces, demand for premium, technology-enabled, and green office space is picking up steam. Workplaces today are becoming active seekers of workplaces that accommodate their social and environmental agendas, too,” Mehrotra added.
Conclusion
The surge in flex space leasing in Q1 2026 underscores a significant shift in the Indian office market. As enterprises and GCCs continue to prioritize flexibility, efficiency, and employee-centric environments, the demand for managed and flexible workspaces is expected to remain strong. The future of commercial real estate in India is poised to be defined by these evolving trends and the growing need for high-quality, sustainable, and technology-enabled office spaces.
