Private Equity investments in flex office spaces recorded at USD 30.9 mn in H1 2026: Knight Frank India

Mumbai, September 20, 2026: The flex office market is moving from operator proliferation towards scale and consolidation, with investors increasingly evaluating enterprise exposure, operating capability and scalability rather than simply the number of locations.  A renewed investor interest was observed during H1 2026 with recorded private equity investments of USD 30.9 mn across two deals.

According to Knight Frank India, Private equity investments increased from USD 25.3 mn in 2017 to USD 112.3 mn in 2019, before the pandemic interrupted the investment cycle. The sector subsequently attracted USD 594.5 mn across nine deals in 2022, its largest annual inflow during the period. Investment moderated thereafter as the market moved towards consolidation. Private equity investments for H1 2026 has already surpassed the investments of USD 24.3 mn recorded across 4 deals during the entire year 2025, showcasing larger-ticket deals signal a potential reacceleration in capital deployment.

Trends of Private Equity Investment in Indian Flexible Spaces

Note: PE investment amount of certain deals is not mentioned due to unavailability of that information

Flex transactions increased from 2.2 mn sq ft in 2017 to 18.6 mn sq ft in 2025, registering a 30% CAGR, underscoring the rapid expansion of the flex office segment. Flex office penetration has also increased significantly, from 4% of the overall office leasing volume of 19.5 mn sq ft in H1 2017 to 24% of the 48 mn sq ft of overall office absorption across the leading eight cities in H1 2026.

This growing penetration is reflected in the 11.4 mn sq ft of flex office leasing recorded in H1 2026. Bengaluru recorded the highest flex absorption at 2.9 mn sq ft, followed by Pune and NCR at 2.2 mn sq ft each and Hyderabad at 2.0 mn sq ft.

Viral Desai, International Partner, Senior Executive Director, Occupier Strategy Solutions, Industrial & Logistics, Capital Markets & Retail, Knight Frank India, said, “The increasing share of flex space absorption reflects a broader evolution in occupier real estate strategies In India commercial market. By converting fixed real estate commitments into variable capacity, it allows businesses to align space with the pace and uncertainty of growth, while creating a new intermediary layer between landlords and occupiers. Its rising penetration, increasing adoption by large enterprises and GCCs, and evolving investment profile suggest that flexibility is becoming a structural component of India’s office market rather than a temporary response to changing workplace preferences. As businesses increasingly treat real estate as an adaptable component of their operating strategy, flex can support not only workspace efficiency but also market entry, expansion and the faster absorption of office space.”

The changing occupier profile reinforces this shift. Large enterprises account for 72% of seats in flex spaces, indicating that flex is no longer primarily associated with freelancers, startups and small businesses. From end use perspective, Global Capability Centres accounted for 52% of flex demand. This showcases that flex office is increasingly becoming part of the real estate strategy of larger organisations seeking greater flexibility in capacity and location.

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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