Flexible Office Spaces Surge with $820 Million Private Equity Funding Since 2017: Knight Frank Report

According to Knight Frank, flexible office space operators have secured $820 million in private equity funding since 2017, driven by increasing corporate demand. The report highlights significant fluctuations in investments, peaking at $595 million in 2022. The market's resilience and projected GDP growth underline its future potential.

Knight Frank has reported that flexible office space operators have received a total of USD 820 million in private equity funding since 2017, driven by increasing demand from corporations.

The report, released on Wednesday, highlights significant fluctuations in Private Equity (PE) investments in India's flexible office space sector over the years.

According to the report, investments rose steadily from USD 25 million in 2017 to USD 49 million in 2018, with a sharp increase to USD 113 million in 2019 driven by investors such as CLSA Capital and Peak XV Partners. However, the market saw a decline to USD 11 million in 2020 and USD 6 million in 2021, attributed to the Covid-19 pandemic.

A resurgence took place in 2022 with investments reaching USD 595 million, supported by deals from Hillhouse Capital and Actis, only to drop to USD 13 million later. A single deal secured USD 8 million in 2024.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, underscored the sector's robust future. He noted India's dynamic commercial real estate market and its resilience. With GDP growth projections for FY 2025 reaffirming India as the fastest-growing major economy, Baijal emphasized that demand for innovative office spaces is increasing. Occupiers are focusing beyond basic amenities to prioritize employee well-being, and flexible office space operators are well-positioned to meet these evolving demands.

By adopting ESG principles and cutting-edge technology, Baijal remarked that the flexible space sector is not merely keeping pace with change but is setting the agenda for the future of workspaces.

(With inputs from agencies.)