As the startup ecosystem flourishes and global capability centres (GCCs) expand, the commercial real estate sector is seeing unprecedented momentum. Amit Ramani, chairman and managing director, Awfis Space Solutions speaks to Raghav Aggarwal about the strong growth in co-working spaces and Awfis’ performance. Excerpts:

How is the office real estate market performing right now?

The industry is doing extremely well. Over the last three years, we have seen strong tailwinds post-Covid, especially with enterprises adopting co-working in a big way. The sector has grown from 25 million square feet to about 75 million square feet, registering a 20% year-on-year growth. FY25 has been the best year in commercial real estate history, with gross leasing touching 77 million square feet. Co-working alone accounts for nearly 15 million square feet, or 20% of the total.

How did Awfis perform in FY25?

We had a strong year. In the first nine months alone, we surpassed market expectations in every quarter. We initially projected a 30% growth, but we are already clocking 41% growth for the nine-month period. For the full year, we expect to close with around 40% year-on-year growth.

How many seats did you add during the year?

We committed to adding 40,000 seats in FY25, and are well on track. By December, we had already reached around 120,000 seats, and we are confident of hitting our target of 135,000 by year-end.

What makes you so optimistic about the domestic market?

There’s a huge opportunity for commercialisation in India. GCCs are a major driver, and not just large Fortune 500 companies, but also mid-sized global players are investing here. The earlier fears of a slowdown in offshoring have been overtaken by this trend. Beyond that, India’s manufacturing push, the China Plus One strategy, and the growth of startups and MSMEs, all signal sustained demand.

What is your current market share and how high are you aiming?

We estimate our market share at about 11-12%. While growth is a priority, we’re equally focused on profitability. This is a relatively new industry. It barely existed a decade ago, so we want to build sustainably, not just chase hyper-growth. We already operate over 200 centres and expect to close FY25 with around 220. That’s four-five times larger than our nearest competitor.

What differentiates Awfis from other players in the market?

The two big risks in this industry are capital intensity and asset-liability mismatch. You could lock in a lease for 5, 9, or even 15 years, but what happens if you don’t have customers after year 2 or 3? We have solved this with our managed aggregation model. We partner with landlords, typically HNIs, family offices, or wealth managers, and ask them to invest in fit-outs. In return, we offer them a higher profit share. This keeps us asset-light and reduces risk. Currently, 65% of our portfolio follows this model, where both we and the landlord share the risks and rewards equally. To our knowledge, no other flex space provider in India does this.

And this model works at scale?

Absolutely. We have successfully implemented it in over 180 locations. It has helped us maintain 40%+ growth while delivering an 86% return on capital. We’re confident that this model will remain key to our efficiency and agility as we scale further.

What’s the geographic mix of your portfolio?

Around 89% of our centres are in tier-1 cities, and the remaining 11% are in tier-2 locations.

Will you continue to focus on tier-1 cities?

Yes. Most of the growth in flexible workspace demand is still concentrated in metros and tier-1 cities. While we are present in tier-2 markets, the bulk of our expansion will remain focused on larger urban hubs.