Co-Working Space Leasing Declines Amidst Growth in GCC Demand

The leasing of office space by co-working operators experienced a significant decline of 43% in the first quarter of this year, with a notable drop in their market share within total leasing transactions. However, overall office space leasing saw a marginal increase, boosted by demand from Global Capability Centers (GCCs).

Leasing of office space by co-working operators saw a sharp 43% annual decline, reaching 21.6 lakh square feet in the January-March quarter of this year, according to CBRE data covering nine major cities.

The previous year had seen co-working operators renting 37.6 lakh sq ft, indicating a significant retreat in market activity. As a result, their share in total office leasing transactions fell to 12% from the 22% seen a year ago.

Conversely, overall gross leasing grew by 5% to reach 180 lakh sq ft in the same period. This growth is driven by rising interest from Global Capability Centers (GCCs), which are expected to account for 35-40% of office space absorption by 2025, spurred by favorable state policies and a skilled workforce.