Corporate India asking employees to be physically present in the office for most of the week is driving sales and outlook for office solution providers, who are seeing growth in demand.
Be it players like Godrej Interio and Space Matrix that build or furnish office spaces or Awfis and Table Space that manage coworking rental spaces across the country, back to office is boosting sales for these suppliers.
They expect this trend to continue.
“Over the past two years, the return to office has contributed to about 39 per cent growth in business,” said Swapneel Nagarkar, executive president and business head at Godrej Interio. Akshay Lakhanpal, chief executive officer (CEO), India, Space Matrix, a Singapore-based global design and build company, said that post-pandemic, with increased corporate focus on workspace strategy and the growth of global capability centres (GCCs), his company’s current financial year order book is expected to cross 11,000 crore with projected revenues between 1850 and 1900 crore. The firm had posted revenue of about /500 crore before FY20.
Leading industry players are banking on potential demand by multinational companies (MNCs), economic growth, favourable policies, and attractive real estate price points.
“There is a steady retum to physical workspaces. Also, we are confident that MNCs will continue to expand GCCs in India,” said Kunal Mehra, joint CEO, Table Space, a Bengaluru-based managed workspace operator. Mehra’s firm has seen a double-digit compound annual growth since 2021.
International property consultant Cushman & Wakefield said that about 70-80 per cent of firms across the top eight Indian cities have mandated that employees work from the office. Many companies that have leased office space, especially in the banking, financial services, and insurance (BFSI) sector, have issued mandates requiring employees to be in the office for four to five days a week.
Information technology (IT) firms — both domestic and multinational — are asking employees to come at least three days a week.
Amit Ramani, chairman and managing director (CMD) at Awfis Space Solutions, said, “Currently, 68 per cent of executives believe employees should work on-site at least three days a week, primarily to maintain a strong company culture. Additionally, 65 per cent view office attendance as ‘very important’ for boosting productivity, while more than 50 per cent consider it crucial for fostering employee collaboration.”
This was leading to a strong growth in occupancy levels. “For instance, our blended occupancy rate stands at 73 per cent, with mature centres operating at 84 per cent,” he added. Blended occupancy is a hybrid approach where employees work both remotely and in the office, allowing for a mix of in-person and virtual work culture.
Manish Khedia, MD, West India, South India & Sri Lanka, The Executive Centre — a Hong Kong-based office solutions provider — saw the increased footfall in offices and stated that his firm witnessed an average growth of 15 per cent due to the back to office.
Khedia is expecting growth to reach 20 per cent within the next year.
According to Knight Frank India, the overall office leasing in the country nearly doubled to 71.93 million square feet (msf) in 2024 from 38.11 msf in 2022 The sharp rise in the demand for leased office space stems largely from employers seeking grade-A offices to foster collaborative, well – designed, productive, and engaging workspaces.
Lakhanpal added, “Gone are the days when real estate decisions were solely driven by cost per square foot. Today’s CEOs and chief human resource officers are actively engaged in the process, recognising the immense power of design as a strategic tool.”
In 2024, the vacancy rates improved to 14.6 per cent, according to Knight Frank India, indicating increased demand. This demand has also led to rents firming up by 3-7 per cent year-on-year (Y-o-Y) across all markets in 2024.
This is consistently higher since 2022, as Indian landlords negotiated better terms than their counterparts in other global markets.
While commercial real estate developers are banking on the potential demand, they also believe that hybrid work culture will continue to coexist.
Sanjay Dutt, MD and CEO of Tata Realty & Infrastructure, said, “To some extent, hybrid work culture will also remain. Employers will give some flexibility to allow people to work from home occasionally. When the employees don’t need to come to the office and when there is no collaboration needed, they can get flexibility and balance. It will continue to be the case.”
Furthermore, the office segment is also facing a demand-supply mismatch where the absorption rate is higher than the rate of new completions.
In 2024, according to Knight Frank India, the top eight Indian cities absorbed office space of 71.9 msf, up 20.8 per cent Y-o-Y.
But the new completions stood at 50.3 msf, up 17 per cent. Cushman & Wakefield estimates new supply of about 55 msf in 2025. This is on the back of a potential demand from GCCs and two-three times growth in project completions.
“The overall market is doing significantly well. There is high demand but less supply. So, this back to office is helping with the overall commercial growth with the advent of GCCs,” said Rajat Rastogi, CEO —west & commercial — Puravankara.