AI Pushes India’s C-Suite Towards Flexible Offices and Away from Long-Term Leases: IWG
Bengaluru, August 11, 2026: Artificial intelligence is accelerating the pace of business and forcing companies to rethink their real estate needs, driving a shift away from long-term office commitments and toward flexible, capital-light models, according to new research from International Workplace Group (IWG). The study reveals that six in ten corporate leaders believe the rise of AI has made it impossible to predict their office space requirements over a two-year horizon. Rapidly advancing technology is transforming productivity, workforce planning, and business velocity, prompting leaders to seek workspace strategies that can scale dynamically with changing demand, IWG said in a press release.
India is experiencing this transition at scale, driven by high technology integration. The country records the world’s highest workplace AI adoption, with 73 percent of professionals regularly using AI tools. Global Capability Centres operating in India—projected to exceed 2,400 by 2030—accounted for 45.5 percent of gross office leasing in the first quarter of 2026. Simultaneously, flexible workspace penetration has risen from around 5 percent in 2017 to approximately 21 percent today. Combined, these trends are making real estate flexibility an increasingly important strategic advantage for corporate leaders across the country.
Rapid technological change is redrawing where work happens. Research indicates that 88 percent of top executives view flexible real estate solutions as essential due to the difficulty of anticipating future space needs. When evaluating location strategies, 42 percent noted that technology enables remote working and reduces central office needs, 39 percent cited a boost in decentralized or flexible office models, and 37 percent highlighted expanded access to distributed talent.
This operational shift is actively taking place across sectors. Nearly all survey respondents—99.8 percent—indicated their organizations are moving real estate expenses from fixed to variable spend to free up growth capital. The majority are investing in hybrid arrangements, with 55 percent establishing networks closer to employee residential areas, including suburban corridors like Noida, Thane, and Whitefield, as well as emerging Tier-2 and Tier-3 markets. Cities like Ahmedabad, Kochi, Jaipur, and Coimbatore now host over 575 flex centers, providing occupiers with cost savings of up to 50 percent compared to primary metro markets. Cost reduction remains a near-universal driver, influencing location choices for 99 percent of respondents.
Rather than relying solely on central headquarters, organizations are building networks of professional spaces that improve agility and reduce commute times. Beyond financial savings, offering access to flexible workspace closer to home can yield an 11 percent productivity uplift over the next five years. Crucially, 76 percent of leaders state that the physical office will become more important over the next two years, underscoring that companies still require dedicated space for collaboration and culture, even as they move away from long-term leases.
CEO, International Workplace Group, Christian Schmitz, said, “AI is accelerating the pace of change for every business, and companies that want to succeed need workplace strategies that allow them to scale up or down quickly, reduce unnecessary fixed costs and give their people access to high-quality workspace wherever they need it. This is about giving businesses the flexibility to adapt as technology changes. Nobody knows exactly what their organisation will look like in two years’ time, but they do know they need the agility to respond. That’s exactly what the IWG platform is designed to deliver.”
Executive Chairman, International Workplace Group, Mark Dixon, said, “AI is not simply another wave of innovation. It is accelerating the velocity of business at a pace few could have imagined, making it far harder for companies to predict what they will need even two years from now. In this environment, long-term office commitments make less and less sense. The future belongs to businesses that can move quickly, access talent wherever it is, and give people professional workspace wherever they need it. AI will make creativity, judgement and adaptability more valuable, not less – and flexible workspace gives companies the agility to respond.”
Country Head, IWG India, Harsh Lambah, said, “India is one of the clearest examples of how AI adoption, and changing workforce expectations are reshaping office demand. Organisations can no longer confidently forecast workforce requirements several years ahead, making flexibility a strategic necessity rather than simply a real estate decision. We’re increasingly seeing companies build workplace networks across metro and Tier-2 cities so they can access talent, reduce commuting times and scale much more quickly.”
