Archive · 25 Nov 2025
Flex Workspace Demand Stays in Top 7 Cities
The Indian government is offering incentives to IT companies to move to smaller cities, but most companies still prefer to stay in the big cities.
These big cities have more jobs, better talent, and more office space, so it's harder for smaller cities to attract companies.
WeWork and other flexible workspace companies are focusing on these big cities because that's where the demand is.
However, some smaller cities like Coimbatore and Indore are starting to see more demand for flexible workspaces.
The government's incentives are helpful, but they aren't enough to change where companies want to be.
Government incentives aim to disperse economic activity to Tier II and Tier III cities, offering up to ₹50,000 per local employee and ₹10 crore for IT parks.
Demand for flexible workspaces remains concentrated in India's top 7 cities, with 17.8 million sq. ft. of gross leasing and 4.3 million sq. ft. of flex leasing.
WeWork India focuses on top 8 cities, targeting higher-value demand for better quality space and employee experience.
Industry peers agree that government incentives haven't shifted the center of gravity, as top metros host enterprise ecosystems and large talent pools.
Some operators see emerging opportunities in Tier II cities like Coimbatore, Indore, and Jaipur, driven by corporate decentralization and regional business activity.
- Who
- Government of Karnataka, IT companies, WeWork India, Incuspaze, Stylework
- What
- Government incentives for IT companies to expand to Tier II and Tier III cities, but flex workspace demand remains concentrated in top 7 cities
- When
- Incentives announced, data from Q2 2025 report
- Where
- India, primarily in top 7 cities, with some growth in Tier II cities
- Why
- Enterprise ecosystems, talent pools, and Grade-A supply are concentrated in top metros, making it difficult for Tier II cities to sustain consistent flex-space demand
- Government Incentives
- Up to ₹50,000 per local employee, ₹10 crore for IT parks
- Relocation Reimbursement
- 50% for up to 50 employees per unit
- Top 7 Cities Demand
- 17.8 million sq. ft. gross leasing, 4.3 million sq. ft. flex leasing
- WeWork Desks
- 1,14,000 desks, 15,000 under fit-out, 1,30,000 expected by year-end
- Tier II Cities
- Coimbatore, Indore, Bhopal, Agra, Chandigarh, Jaipur seeing growth
- Metro Vacancy Rates
- Mumbai and Chennai at 15%, 10–20% availability
- Flex Space Viability
- Depends on predictable demand, not just lower rentals