Demand for office space is rising from a segment of Small & Medium Enterprises (SMEs) which are now moving to high-quality real estate from industrial galas [shop floor office] and nondescript locations, considering the astronomical high valuations seen through listings in SME exchanges.

The purpose is to meet clients and investors at a smart address as well as to provide employees a better work environmental, developers and analysts said.

To cater to this trend, developers are designing office buildings that specifically meet the requirement of this segment which needs about 1,000 to 5,000 sq ft office space in key locations. 

In Mumbai upcoming micro–Central Business Districts (CBDs) like Ghatkopar, Andheri, Kurla, Powai are being considered by SME’s for new age Grade A office spaces that provide accessibility, connectivity, parking space, natural environment, larger common areas and modern amenities alongside core office space.

Raahul Maroo, Founder & Managing Director Tatvm Corp which is into real estate said, “We are seeing a rapid change in SMEs. The demand from them for Grade A office space is more for working area that would also attract institutional interest and create significant value for their clients.”

“SMEs are demanding offices that reflect the quality and ambition of their businesses within their constrained budgets. Understanding their needs we have created niche product offering to cater to their demand,” he said.

He said a segment of boutique developers is building smaller commercial offices spaces to for the SMEs segment.

As of September 2026, 136 SME IPOs have been listed of which several SME IPOs had an issue size between ₹25 crore and ₹150 crore. 

This indicates the liquidity with segment. Besides, Government support has enabled this segment to have bigger ambitions. 

Bappaditya Basu, Managing Director, Anarock Commercial said, “We are certainly witnessing a clear move by smaller businesses and start-ups from ad hoc or low-grade office space to professionally managed and also impressively addressed workspaces.”

“Startups are the largest consumers of flexible office space, comprising 37.5% of all flex seats rented on a national level, outnumbering the combined flex space rented by corporates and MNCs. The average deal size has also more than doubled in terms of seats per office space,” he said.

“This is reflective of a conscious shift by smaller occupiers toward quality, investor-ready locations, rather than continuing with cost-driven ones,” he stated.

“This has led developers and flex operators to design spaces for this segment, and it is one of the reasons why India has overtaken several Asia-Pacific markets to become the region’s largest flexible office sector,” he added.