National, September 17, 2025 : India’s office and workspace market is booming, with record-breaking leasing activity driven by demand from Global Capability Centres (GCCs), IT services, and flexible workspaces. This growth is occurring alongside a significant increase in green-certified office spaces and the adoption of flexible work models, which are becoming integral to occupier strategies. Bengaluru, NCR, Hyderabad, and Pune are key hubs for this expansion, with the overall market showing resilience and poised for continued growth in the coming years.
The recent GST Council has recommended tax cuts on key construction materials: the GST on cement has been reduced from 28% to 18%, and on marble, granite, travertine blocks, and materials like sand-lime bricks and stone inlay work, from 12% to 5%. These reductions are expected to provide a positive boost to India’s office and workspace sectors, says Archana Naidu Board Member and Head of Business, iKeva
Lower Construction & Fit-Out Costs
Cement and finishing materials account for a significant portion of construction costs, typically ranging from 10–30%. With these GST reductions, developers and workspace operators are likely to save 3–5% on overall project costs.
This improved cost structure directly benefits office development and fit-outs—especially for co-working spaces, where infrastructure and interiors are critical.
Improved Cash Flow & Scalability for Co-Working Operators
Co-working providers often invest heavily upfront and rely on Input Tax Credit (ITC). A reduced GST burden eases working capital constraints, enabling faster expansion and more competitive pricing for clients.
Easing of Rental Pressures & Competitive Edge
The cost savings could be reflected in lower rental rates or more competitive leasing offers, giving organized developers an edge in the market.
Reduced costs across the commercial real estate supply chain—from construction to interiors—could make co-working and retail-oriented office environments more accessible.
Greater Project Viability & Affordability
Lower input costs improve margins and overall project economics for office developers. This can translate to more competitive rental rates and better returns.
Administrative & Compliance Relief
The simplified GST structure (now with two primary slabs: 5% and 18%) reduces classification disputes and streamlines tax compliance for workspace projects.
GST cut Impact Snapshot
| Benefit Area | Impact for Office & Workspace Sector |
| Construction Costs | 3–5% reduction improves viability and margins |
| Co‑working Scalability | Better cash flow, faster expansion |
| Project Economics | More predictable budgeting, supportive macro sentiment |
| Compliance Simplicity | Easier taxation and classification |
| Leasing Limitations | No ITC on rentals → partial benefit capture |
| Administrative Risks | Local levies may dilute gains |
The GST cuts on construction materials offer a significant boost to India’s office and workspace real estate sector feels Archana Naidu Board Member and Head of Business, iKeva . They make the launch of new projects more attractive, reduce capital outlays, and fuel growth in co-working spaces through improved affordability and better financial manageability.
Archana Naidu
Board Member and Head of Business, iKeva
