In December last year, Andhra Pradesh chief minister N Chandrababu Naidu, in a bid to boost employment opportunities for women, ordered state officials to facilitate development of co-working spaces and “neighbourhood working spaces”. By the end of 2025, Andhra Pradesh aims to set up 1,50,000 seats in co-working space centres in government and private buildings.
While this push comes from the government, private players are on similar trajectories.
Umesh U, co-founder and managing director of DevX, whose company is an office base provider with aesthetic spaces, and has a strong presence in tier-2 cities, told FE, “The next growth spurt in this industry will be driven by demand in tier-2 and tier-3 cities.”
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Amit Ramani, chairman and managing director of Awfis Space Solutions, agreed. Since September 2023, he said, Awfis has increased its footprint in tier-2 cities by 43%—going from 14 to 20 centres, most recently opening up a space in Guwahati. He went on to explain that multiple factors at play—hybrid work models, a growing emphasis on health and wellness, integration of technology and innovation, and increased focus on collaboration— have helped build this industry up, and these factors are here to stay.
Said Umesh, “2025-26 will be a standout year for the industry as 8-10 large companies in this space will be getting listed on the stock exchange. With companies going public, we can expect capital infusion of Rs 12,000-15,000 crore.” He added, “We might also see consolidation across the spectrum—acquisitions and mergers will happen more frequently as companies would want to establish a strong presence in tier-1,tier-2, and tier-3 cities.”
What the DevX co-founder said is already happening. In June 2024, flexible workspace firms Qdesq and MyBranch released a joint report noting that between 2020 and 2024, flexible workspaces in non-metro cities recorded a 4x growth, and were set to grow to 25% of the entire market by the end of the year.
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