Flexible Workspace Market In India’s Tier 2 & 3 Cities Soars With 4x Growth

Qdesq and MyBranch, players in flexible workspace solutions, have jointly published an exclusive report revealing the exceptional growth and future potential of the flexible workspace market in India’s Tier 2 and Tier 3 cities. The detailed report provides valuable insights into how these cities are becoming economic powerhouses, driven by infrastructural advancements, government initiatives, and changing workplace dynamics.

India’s economic landscape is rapidly evolving, with non-metro cities emerging as significant contributors to the national economy. According to the World Bank’s 2023 report, India achieved an impressive 7 per cent GDP growth in FY 2022-23, positioning it as the fastest-growing major economy on the global map. This robust economic performance is not limited to metropolitan areas; Tier 2 and Tier 3 cities are equally playing a crucial role in driving this growth.

Government initiatives such as the AMRUT (Atal Mission for Rejuvenation and Urban Transformation) and the Smart Cities Mission have been instrumental in transforming the infrastructure of these cities. These programmes have enhanced urban amenities, attracted investments, and fostered a thriving startup ecosystem. A survey by MyRCloud highlighted that non-metro cities created 1.7 million new white-collar jobs in 2023, surpassing the 1.5 million jobs generated in metro cities.

The joint report of Qdesq and MyBranch report underscores a significant shift in the demand for flexible workspaces, towards Tier 2 and Tier 3 cities in India. Qdesq, a leading platform to discover and book flexible workspaces, has reported a remarkable 4x growth in the supply of flexible workspaces in non-metro cities from 2020 to 2024. This surge is attributed to the increasing need for cost-effective and adaptable office solutions that accommodate the evolving work culture.

Co- Founder of MyBranch Services Kushal Bhargava said “Our report shows a remarkable shift in job creation, with non-metro cities generating 1.7 million new white-collar jobs in 2023, surpassing metro cities. We've seen significant interest from sectors like financial services, IT, insurance, e-commerce, and HR. Cities like Ludhiana, Vellore, and Siliguri are emerging as prime locations for flexible workspaces, indicating a dynamic shift in India's economic landscape.”

"Tier 2 and 3 cities in India are rapidly emerging as vibrant hubs for enterprise growth, fueled by increasing demand and a burgeoning supply. Our joint report will be a revelation, offering a fresh perspective on the untapped potential of these regions. We can expect a remarkable 25% growth in the demand for flex spaces in 2024 compared to the previous year, underscoring the significant opportunities these cities present.” says Paras Arora, Founder & CEO - Qdesq.

MyBranch, a pioneer in office space solutions, has strategically leveraged this trend. In 2023 alone, MyBranch received over 125 office space inquiries and generated approximately 70 leads from Tier 2 and Tier 3 cities. The top cities exhibiting high demand include Ludhiana, Vellore, Siliguri, Nashik, and Jalandhar. The primary sectors driving this demand are financial services, IT, insurance, e-commerce, and HR.

As per Qdesq platform, the surging demand for office spaces in smaller cities has resulted in an increase in prices. The report notes a 5-8% rise in the price per desk and per square foot from Q2 to Q3 of 2023. This trend reflects the escalating interest from large enterprises and startups alike.

Approximately 30 per cent of MyBranch’s clients in Tier 2 and Tier 3 cities in 2023 were large enterprises, highlighting the strategic shift of major businesses toward these emerging markets.

As large enterprises continue to adopt hybrid work models and leverage local talent, the demand for flexible office spaces is expected to rise further.

The report forecasts a promising future for the flexible workspace industry in non-metro cities. With a projected 25 per cent increase in inventory by the end of 2024, cities like Pune, Ahmedabad, Jaipur, and Indore are set to lead the supply. By March 2030, the total Grade A and B office stock is anticipated to reach 1.4 billion square feet, with flexible office spaces comprising 33 per cent of this total. Qdesq is well positioned to capitalize on this demand.

The startup ecosystem in non-metro cities is flourishing, driven by innovative entrepreneurs and supportive government policies. These cities offer a conducive environment for startups, including access to talent, lower operational costs, and growing markets. The report indicates that non-metro cities are increasingly becoming hubs for innovation and entrepreneurship, contributing to job creation and economic diversification.

Businesses, especially startups and SMEs, prefer flexible workspaces for their affordability, scalability, and convenience. The trend is also being adopted by large enterprises, which are shifting towards hybrid work models that combine remote and office-based work. This shift has led to an increased demand for coworking spaces, managed offices, and virtual offices.

The joint report by Qdesq and MyBranch underscores the transformative potential of India’s Tier 2 and Tier 3 cities in the flexible workspace sector. As businesses continue to adapt to new work paradigms, the strategic expansion into these markets offers unparalleled growth opportunities. Qdesq and MyBranch are committed to driving this positive change through their innovative and flexible workspace solutions, empowering businesses to thrive in a rapidly evolving economic landscape.