India–EU Free Trade Agreement: A Watershed Moment for the Indian Office Space Sector

The recently concluded India–European Union Free Trade Agreement (FTA) marks a defining moment for the Indian office space sector and is set to significantly accelerate demand for modern, flexible, and sustainable workspaces, according to Ms. Archana Naidu, Board Member and Head of Business at iKeva, South India’s largest provider of flexible, managed workspaces and coworking solutions.

Calling the agreement a landmark development, Ms. Naidu said, “The India–EU deal will act as a strong catalyst for inward investment and deepen India’s integration with global business ecosystems. This will have a direct and positive impact on the office real estate and flexible workspace sector.”

With over 6,000 European companies already operating in India, the agreement is expected to spur increased investments across IT, engineering, manufacturing, and R&D-intensive sectors. This, in turn, will drive the expansion of Global Capability Centres (GCCs) and innovation hubs, particularly in key commercial markets such as Hyderabad, Bengaluru, Mumbai, and Pune.

Ms. Naidu further highlighted several structural shifts expected to reshape the sector:

Growth in Flexible and Managed Workspaces

“The post-pandemic workplace transformation, combined with foreign companies seeking cost-effective and scalable expansion models, has already resulted in flexible office spaces accounting for nearly 20% of total office leasing in 2024. The India–EU agreement will further accelerate growth in this segment,” she noted.

Rising Demand for Green-Certified Buildings

The agreement’s emphasis on climate action and circular economy principles is expected to boost demand for LEED-certified and green-certified commercial buildings. “European companies place strong emphasis on sustainability, energy efficiency, and ESG compliance, which will significantly influence future office developments in India,” Ms. Naidu added.

Expansion of Professional Services

Increased bilateral trade and cross-border operations will also drive growth in consultancy, legal, financial, and professional services, leading to higher demand for premium office spaces in central business districts of major Indian cities.

Archana Naidu, Board Member & Head of Business, iKeva