By Mukul Pasricha, Founder & CEO, Spring House workspaces
India’s office market has changed fast in the last two years. Enterprises that once signed 9-15 year leases are now asking for seats that can scale up or down quarter by quarter, with the operator handling fit-outs, IT, and daily ops. In short: asset-light has gone mainstream.
Below is a simple, on-the-ground view of why large teams in India are moving from traditional leases to managed workspaces (sometimes called “managed offices” or “enterprise coworking”), plus what to watch out for when you make the switch.
1) Flex is no longer fringe it’s a meaningful slice of demand
Flexible workspaces have graduated from a startup perk to a core strategy for big occupiers. Industry trackers show the shift clearly: in 2024, India recorded its highest-ever office leasing and flex operators captured a growing share of it as occupiers sought speed and scalability.
This is not just a metro story. The rise of Global Capability Centres (GCCs) across Bengaluru, Hyderabad, Pune, and NCR is pushing large, quick blocks of demand into flex/managed formats because these centres scale rapidly and need plug-and-play infrastructure. Recent coverage highlights GCCs as a key driver of managed workspace growth.
2) Capex avoidance and balance-sheet clarity
Under Ind AS 116 (Leases), most traditional leases sit on the balance sheet as a right-of-use asset with a corresponding lease liability. That changes how CFOs look at long commitments. Managed workspaces are often structured as service contracts (operator supplies space and services), which can reduce on-balance-sheet lease recognition and smooth P&L subject to contract specifics and auditor judgment. In practice, this accounting backdrop nudges enterprises toward asset-light options.
Beyond accounting, the cash cost of a traditional lease includes large upfront fit-out capex, lock-ins, and reinstatement at exit. In a managed model, the operator funds and amortises fit-out; you pay an all-in per-seat fee with clear SLAs (IT, housekeeping, utilities, security). For growth teams, that’s easier to forecast and far faster to deploy.
3) Speed to market and scalability beat “perfect” layouts
Traditional leases can take 6–12 months from search to go-live once you add fit-out design, approvals, and procurement. Managed operators run standardised build programs and vendor stacks, so enterprise-grade floors (100 – 1,000+ seats) can go live in weeks or a few months, depending on customisation. India’s leading providers report large managed portfolios and high occupancy, reflecting sustained enterprise pull for this speed.
That “time saved” has a hard value. For a GCC hiring 200 engineers in Hyderabad or Pune, launching even one quarter earlier can mean product milestones met, vendor contracts executed, and revenue recognition that dwarfs the rent delta between options.
4) Distributed footprints match talent and commute realities
Post-pandemic hiring patterns favour multi-node footprints Grade-A parks in Outer Ring Road or HITEC City, plus satellite hubs in Whitefield/HSR (Bengaluru) or Kharadi/Balewadi (Pune). Managed workspaces make this practical: you can open two or three pods of 150–300 seats each near talent clusters and then rebalance every appraisal cycle. Recent market updates show flex operators doing large block deals in these very corridors, aligning with where employees live and how teams scale.
5) Better total experience without building an FM organisation
Enterprises don’t want to be in the business of running cafeterias, managing access control, or handling UPS maintenance. Managed operators tie workplace experience (reception, meeting suites, community areas) to uptime (redundant internet, power, compliance) through SLAs. This is especially valuable for regulated sectors (BFSI, health-tech) that need controlled zones, dedicated servers, or camera coverage without building the entire stack from scratch.
India’s flex leaders have matured here: multiple operators now deliver bespoke managed floors with enterprise IT rooms, dedicated lifts and turnstiles, biometric controls, and brand-consistent interiors without the tenant carrying capex. Public filings and industry reports document this shift from generic coworking to customised managed offices at scale.
6) Cost is about predictability, not just a lower rupee per seat
Yes, on a pure “rent per sq. ft.” basis, a direct lease can look cheaper. But enterprises care about total cost of occupancy: rent + fit-out amortisation + utilities + CAM + IT + FM headcount + downtime risk + reinstatement. Managed contracts turn most of that into an all-in per-seat with variable blocks for meeting rooms and parking. Finance teams like this because it aligns with workforce plans and quarterly revisions.
Meanwhile, market depth has improved. India’s office market hit record absorption in 2024, and operators scaled in step so procurement teams can now run proper RFPs across multiple providers and cities to find the right price-service trade-off.
7) What enterprises actually ask for (patterns from the field)
From active RFPs and fit-outs across India, a few consistent asks show up:
1. Dedicated floors with a managed contract (not shared coworking bays), branded reception, and controlled access.
2. IT & security baked into SLAs: Two diverse ISP paths, enterprise Wi-Fi, visitor management, CCTV retention, SOC integration if needed.
3. Growth clauses: The ability to add 20–40% seats in-building within 3–9 months.
4. Occupancy flexibility: Buffer seats during ramp-up; ability to resize at renewal without penalties that wipe out the benefit.
5. Business continuity: Hot-standby meeting rooms, quick swing space within the operator’s city network.
These requirements are precisely why the enterprise share of flex is rising; operators have productised them. Industry analyses and provider disclosures mirror these trends as they tout enterprise-grade managed offerings and multi-city networks.
8) Risks and how to mitigate them
a) Contract structure. If “managed” deal effectively transfers control of the space to you for most of the term, auditors may view it as a lease under Ind AS 116. Work with finance early; design the contract to reflect genuine services (space + operations) rather than a disguised lease, and document decision rights and substitution rights clearly.
b) Operator covenant. Choose partners with balance-sheet strength and a proven delivery record (look at occupancy, centres live, and city spread). Public filings like those from Awfis after its 2024 listing help assess scale and stability.
c) Over-customisation. The more bespoke the fit-out, the more you’re locked to a location or vendor. Keep 70–80% of the floor on a standard kit of parts (pantries, focus rooms, huddle rooms), and reserve custom items for your true differentiators (labs, high-density trading, secure DC rooms).
d) Hidden opex. Scrutinise what’s included in the per-seat: electricity, DG diesel, seat moves, deep cleaning, AV support, additional security, and out-of-hours HVAC. Ask for a rate card and monthly performance dashboards.
e) Landlord dependencies. Even the best operator is only as good as the building’s base infra (chillers, lifts, power redundancy). Prefer Grade-A parks and CBD towers where operators already run other enterprise floors; market data shows much of India’s flex supply clustering in these assets.
9) A simple playbook to go asset-light in India
Define the problem: headcount plan by city/quarter, hybrid policy, business-critical adjacencies (client site, transit, airport).
1. Issue a two-track RFP: (a) direct lease with fit-out partner; (b) managed workspace with clear SLAs. Evaluate total cost of occupancy and time-to-go-live.
2. Design for utilisation: smaller private offices, more huddle rooms, bookable project rooms, neighborhoods for teams, and a 60–75% target utilisation (not 1:1 seats).
3. Bake in flexibility: expansion rights, step-down options, and review gates every 12 months.
4. Tie payments to outcomes: uptime SLAs, ticket SLAs, NPS/CSAT, and financial credits for chronic misses.
5. Plan exists upfront: standard reinstatement terms and knowledge transfer for IT/security.
10) The bottom line
For Indian enterprises especially GCCs and fast-scaling teams the managed workspace route offers faster launches, cleaner cash flows, and the agility to follow talent. The old logic of “lock a big lease and build everything” is giving way to service-led, asset-light footprints that you can reshape every year. With India’s office absorption strong and operators now public, well-capitalised, and battle-tested, the risk-reward has tilted decisively toward management.
If you still need a direct lease for a flagship HQ, consider a hybrid stack: one anchor lease for long-term identity, plus managed nodes for growth and projects. That combination is what many large occupiers are quietly standardising today.
Summary
Enterprises in India are increasingly moving from long-term leases to managed workplaces, and adopting an asset-less strategy that offers speed, flexibility and cost predictability. With operators handling fit-out, IT and daily operations, businesses avoid heavy capital expenditure and gain faster market penetration. The rise of global capability centers (GCCs) has further fueled the demand for plug-and-play spaces in key cities. Although traditional leases may seem cheaper per square foot, the total cost of occupancy often favors managed models. With record office absorption in 2024 and a growing share of flexible spaces, managed workplaces have now become a mainstream option for Indian enterprises.
