AI lifts demand for flexible office spaces as firms seek workplace agility

Artificial intelligence (AI) is emerging as a demand enabler for flexible office spaces as enterprises grapple with greater uncertainty around workforce requirements and increasingly prioritise flexibility, and speed-to-market. 

According to Umesh Uttamchandani, managing director (MD), Dev Accelerator, AI-native startups are the most visible source of demand. “They are small, and they move quickly. Managed space is not a compromise for these companies. It is the only format that works.” 

About 45 per cent of enterprises are unable to accurately forecast headcount requirements, while lease commitments of more than five years have declined 40 per cent compared with pre-2020 trends, a report by JM Financial said. 

AI is changing the type of space being sought. Karan Virwani, MD and chief executive officer (CEO), WeWork India, said AI teams were driving greater demand for collaborative zones, project rooms, meeting spaces and quiet areas, alongside higher requirements for connectivity, power density, IT, audio-visual and security systems. 

WeWork India’s study with Redseer found that AI hiring in India has grown sixfold since 2019, with more than 700,000 AI professionals in the country. Ninety-five per cent of enterprises expect to accelerate AI adoption over the next 18-24 months, while nearly half have established dedicated AI labs or centres of excellence, Virwani said. 

Flex operators accounted for approximately 25 per cent of total office leasing activity in India in the first half of 2026 (H12026), compared to 16 per cent in H1 2025, said Ram Chandnani, MD, leasing services, CBRE India. Occupiers are increasingly adopting a core-plus-flex portfolio strategy, he said, driven by operational agility, faster scalability and access to high-quality, amenity-rich environments. 

“Rather than replacing conventional offices, flex spaces are increasingly complementing office demand, enabling occupiers to balance stability with adaptability,” Chandnani said. 

Utkarsh Kawatra, CEO and cofounder, myHQ, said flex’s share of office leasing had risen from 5 per cent in 2017 to 21 per cent in 2025 and 24 per cent in H1 2026. Large enterprises now account for 72 per cent of flex seats nationally, with the global capability centres (GCCs) alone accounting for 52 per cent, he said. 

“Core + flex is now the default strategy for large occupiers, not a fallback for smaller ones,” Kawatra said. Eighty-two per cent of enterprises plan to increase flex usage, he added. 

Virwani expects AI to be a net positive for office demand and said AI-led expansion could add nearly 79 million square feet (msf) of incremental office demand by 2030. The AI workforce within GCCs is projected to rise from approximately 181,000 currently to 730,000 by 2030, while 86 per cent of GCCs expect net headcount growth, he said. 

“The AI-focused GCC is where the more consequential demand sits. Global companies standing up AI and machine learning capability in India almost never begin with a campus now,” according to Uttamchandani. 

Awfis Space Solutions chairman and MD Amit Ramani also sees AI as a net positive for office demand, estimating that India’s AI-led growth could generate an additional 45-50 msf of real estate requirement by 2030. 

However, industry executives also caution against attributing the broader increase in flex demand to AI alone. Kawatra ranks GCC expansion, cost optimisation, hiring uncertainty and hybrid work ahead of AI as standalone drivers. AI is still at an early stage as a separate demand category and is increasingly embedded within GCC expansion and workforce planning, he said.

Anuj Puri, chairman, Anarock Group, said, “The growing office demand is organic and not driven by AI. It is mainly driven by the various sectors that are important parts of the growing economic base. Sectors like manufacturing, industrial, BFSI and consulting are also active occupiers of office space today. However, many do prefer to operate from flex spaces where they have the flexibility of scaling up or down and remain asset-light.”