Flexible workspace providers see higher demand from AI firms

“Leading shared workspace firms WeWork India and IndiQube have signed multiple deals with AI startups in Bengaluru and other cities in the last year or so," said a person familiar with the companies' plans. 

WeWork India, for instance, has signed lease transactions with companies such as Asper.ai Technologies Pvt Ltd, an AI platform for consumer goods, and Eightfold AI India Pvt Ltd, a talent intelligence platform.

Spokespersons of WeWork India and IndiQube, both in IPO mode, declined to comment. 

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“AI is one of the most dynamic and fast-growing sectors today, and at Table Space we are seeing increasing demand from AI-first companies. As these businesses scale and adapt to market shifts, flexible workspaces offer the ideal solution—allowing expansion, quick pivots, and operational efficiency," said Karan Chopra, co-CEO and chairman, Table Space.

“We are particularly seeing Pune and Hyderabad emerge as hotspots for AI and tech-focused clients who require office space," he said. 

A 2024 report by Nasscom and Boston Consulting Group said the AI market in India is projected to grow at 25-35% compounded average growth rate till 2027, supported by a large AI talent base and high investments. The AI market size, at $7-9 billion in 2023, is estimated to reach $17-22 billion in 2027. 

Manas Mehrotra, founder, 315Work Avenue, said AI firms prefer mid-to-large spaces in prime locations, offering flexibility to grow and access talent. “…This expansion is significantly driven by the rise in AI and tech research facilities. In addition to AI, deep-tech startups are now leveraging flexible workspaces to facilitate quick scaling and changing infrastructure demands," he said. 

Specialised workspaces

In the recent past, Mehrotra said several companies specializing in big data analytics, insights-led customer engagement platforms and AI solutions firms have chosen 315Work Avenue’s customized workspaces.

Consultants said managed and flexible office spaces, which accounted for 20% of total office leasing in 2024, work well for AI-led businesses that have been expanding and raising fresh funding.

Rahul Arora, head-office leasing and retail services, senior managing director (Karnataka, Kerala), India, JLL, a property advisory, said emerging sectors, particularly AI and ML (machine learning), are popular and driving demand for office space. Flexible workspaces have become increasingly attractive in this landscape, offering numerous advantages, he said. 

“Such workspaces require minimal upfront investment, can be acquired swiftly, and provide tailored solutions to meet diverse business needs," Arora added. 

Hanto Workspace has partnered with AI-driven firms such as Future AGI, Composio, and Skyfall AI for long-term workspace solutions. While the average space allocation per employee in conventional startups is 40-50 sq. ft, AI startups require 90-100 sq. ft per person. 

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“This is primarily due to their need for high-powered computing infrastructure and leaner workforce. Preferred locations include tech hubs and business districts in Bengaluru, such as Koramangala, HSR Layout, and Whitefield," said Aashit Verma, founder of Hanto Workspace.

Five cities in demand

While Bengaluru remains the primary hub due to its strong tech ecosystem, flex office operator Incuspaze said it is also seeing interest in Hyderabad, Pune, Gurugram, and Chennai, where AI startups and research and development centres are expanding. 

“The demand is being driven by a mix of early-stage AI startups, research-driven firms, and larger tech companies setting up AI divisions," said Sanjay Chatrath, co-founder and managing partner, Incuspaze.

AI companies typically take up spaces ranging from 50 to 500 seats, with some larger firms requiring entire dedicated floors or customized office setups.