Smartworks Coworking Spaces has released a comprehensive joint report with UnearthIQ detailing the projected growth trajectory of India's flexible workspace market, indicating substantial expansion driven by Global Capability Centers (GCCs).

Market Valuation and Growth Projections

According to the joint report titled "India's Next Commercial Real Estate Wave: The Rise of Flex Spaces Fueled by GCC Growth," India's flex space industry is entering a hyper-growth phase. The market is projected to surge from its current valuation of $3-4 billion to $9-10 billion by 2028.

GCC Expansion Driving Market Growth

The report identifies GCC expansion as the primary catalyst for this remarkable growth. India currently hosts 1,850 GCCs employing nearly 2.20 million professionals. These centers are expanding rapidly, adding 80,000-120,000 seats annually and creating a $170-254 million yearly opportunity for workspace operators.

Commercial Real Estate Market Context

India's broader commercial real estate market, currently valued at $50-60 billion and ranking as the fourth-largest globally, is projected to reach $120-130 billion by 2030. The office segment, representing $22-26 billion and forming 40-50% of the total market, is being reshaped by GCC growth, IT expansion, and hybrid work models.

Strategic Platform Development

Harsh Binani, Co-Founder of Smartworks, emphasized the company's commitment to supporting this transformation through SmartVantage, a purpose-built platform designed to support GCCs from setup to scale across Tier-1 and Tier-2 markets.

Gaurav Vasu, Co-Founder CEO, and Shail Maniar, Co-Founder GCC Practitioner at UnearthIQ, highlighted that flex operators combining scale with technology and end-to-end enablement will define the next decade of GCC growth.

Market Evolution and Service Integration

The report indicates that flex space operators are evolving from workspace providers into comprehensive GCC-as-a-Service partners, offering unified solutions including fit-outs, talent support, compliance, and operational enablement. This consolidation simplifies setup processes and accelerates scaling for enterprises seeking asset-light, operational expenditure-led models.

CARE Ratings Limited has reaffirmed the credit ratings for Smartworks Coworking Spaces Limited (SCSL), maintaining its CARE A- (Stable) rating for long-term bank facilities and CARE A1 for short-term bank facilities. This reaffirmation follows an earlier upgrade on November 6, 2025, reflecting the company's continued operational improvements and strengthened financial profile.

Key Highlights

• Rating Reaffirmation: CARE A- (Stable) for long-term and CARE A1 for short-term bank facilities
• Improved Operations: Continued enhancement in scale and efficiency
• Successful IPO: Listed on stock exchanges from July 17, 2025
• Strengthened Financials: Enhanced capital structure and improved debt coverage indicators

Financial Performance

Smartworks Coworking Spaces has demonstrated robust growth and financial stability, as evidenced by its recent financial data:

Despite the negative net profit, which is largely attributed to accounting policies related to non-cancellable and renewable lease tenures under IND-AS, the company has shown significant improvement in its operating income and EBITDA.

Operational Strengths

1. Pan-India Presence: SCSL operates across multiple cities, reducing geographical concentration risk.
2. Diverse Client Base: The top 20 tenants contribute only 28% of total rental income, minimizing business risk.
3. Long-term Contracts: Average total tenure with customers is 4 years, providing revenue visibility.
4. High Occupancy: 83% occupancy rate as of March 31, 2025, up from 80% in the previous year.

Capital Structure and Liquidity

The successful IPO in July 2025 has significantly improved SCSL's capital structure. As of September 30, 2025, the adjusted overall gearing without considering lease liabilities improved to below unity, standing at 0.5x. This represents a substantial improvement from the previous year's figure of 19.56x.

Future Outlook

While SCSL has shown impressive growth and operational improvements, investors should note:

1. The company continues to report accounting losses, primarily due to IND-AS accounting policies.
2. Expansion plans in the pipeline may pose market risks, although the modular nature of capex provides some flexibility.
3. The company remains exposed to macroeconomic factors and the cyclical nature of the real estate industry.

The stable outlook assigned by CARE Ratings suggests an expected continuation of improvement in the company's financial performance in the near-to-medium term, driven by healthy growth of space under management and comfortable occupancy levels.

Investors and stakeholders should monitor SCSL's ability to maintain its growth trajectory, manage expansion risks, and navigate the competitive coworking space market as key factors in its future performance.