The Executive Centre explores SL’s emerging flex office space market

TEC Managing Director for West and South India and Sri Lanka Manish Khedia

PIC BY Nisal Baduge

The flexible workspace industry, though often underdiscussed, is rapidly emerging as a prominent component within the global real estate sector. 

Following the COVID-19 pandemic in 2020, businesses have now begun to increasingly look for adaptable, cost-efficient and—most importantly—low investment risky workspaces to carry on their operations.

Even in Sri Lanka, the trend is gaining notable traction, particularly due to the island’s strategic location in the Asia-Pacific region, which positions it well to capitalise on this potential.

Among the forefront of companies catering the demand locally for ‘flex office spaces’ is The Executive Centre (TEC), commanding a notable 35 percent market share. The company recently announced a US $ 750,000 investment to establish a new workspace on an additional floor at the World Trade Centre (WTC) in Colombo.

TEC Managing Director for West and South India and Sri Lanka Manish Khedia recently sat down for an exclusive interview with Mirror Business to discuss the evolving flex office landscape in Sri Lanka and the reasons influencing TEC’s decision to expand its footprint in the island.

Below are the excerpts from the interview.

Q:Let’s begin with your entry into the Sri Lankan market in 2017. What were the strategic reasons behind that decision and how has the journey influenced your recent investment of US $ 750,000 to expand further?

Our entry into the Sri Lankan market began in 2017, with a strategic partnership at the iconic WTC in Colombo. We had a lot of requests from many of our existing clients for premium flexible office spaces in Sri Lanka, who were requesting our presence in Colombo. This sparked our discussions and by April, we finalised our decision. By 2017, we had successfully established our first centres on levels 35 and 37 of the WTC West Tower.

The synergy with the WTC team has been instrumental in our journey and I’m pleased to say that our partnership has only strengthened over the years. Just before COVID, we launched our second centre at the MAGA One building, which was actually driven by global demand from the clients who wanted us to expand at a new location.
Overall, it’s been an exciting journey and now we’re happy to announce our third expansion on a new floor, on level 23 of the WTC East Tower.

Q:What makes Sri Lanka an attractive market for flexible office spaces?

Sri Lanka is a significant player in the competition for us, particularly in terms of tourism, which I think drives demand for flexible office spaces. We work with a diverse client base with around 75 percent being multinational companies that operate here. Despite the challenges, the Sri Lankan economy has been resilient and demand from these multinationals remains strong. 

The market here has been fantastic for us over the past two years and we are making our new investment with a strong backing from many of our clients. We see a significant momentum in growth and our investment aligns well with this expansion opportunity.

Compared to 2023, we have grown by 35 percent year-on-year in 2024. We are looking to close this year with an EBITDA revenue of US $ 420,000, compared to last year’s US $ 280,000. Our intent is to maintain a minimum of 15 percent growth and reach an EBITDA revenue of US $ 2 million. We are hopeful that within the next three years, we can reach US $ 3 million.

Q:You mentioned that 75 percent of your clients are multinationals but TEC also caters to the local demand. How would you describe your approach to meeting the local requirements?

Well, basically our services remain the same. Being a global company means we attract a lot of multinationals, yet we also work closely with several local companies. Our flexible office space model allows us to serve both groups effectively.

The beauty of a flex office space is in the shared environment, where the clients can benefit from common amenities like cloud facilities, meeting rooms and boardrooms, which are all available on a shared basis. But most importantly, each client receives secure private access to their office space. We make sure, when a client comes in, they feel they have a private, secure space for their office within the shared environment.

Q:Speaking about the requirements of local clients, do you notice any unique features they look for compared to your clients in other regions?

I think for our local clients, security of the office unit is a top priority. Therefore, access control should definitely be beyond the basics. TEC is the only company that doesn’t rely on traditional locks and keys. Instead, we provide access cards uniquely programmed for each client.

Another key differentiator for us is our focus on hospitality. Unlike traditional real estate companies, we operate with a service-oriented approach, which is a commitment we’ve upheld for over 30 years. As you observed, when clients arrive, they’re greeted by a three-member team at the reception. When we say ‘premium’, it’s not only about the space but also about our dedicated members and the level of service they provide. We try to bring a hospitality mindset into the flexible workspace sector to set new standards of service that feels comparable to a five-star hotel.

Q:So, compared to the other flexible office providers in the country, what would you say is unique at TEC?

Our uniqueness lies in our product quality, our ongoing investments and our team’s training on global standard operating procedures. We place a strong emphasis on maintenance and the customer experience. I mean, we operate in over 16 countries and 36 cities, so we have global operating tools that keep our services consistent. While many companies can create stylish spaces, I think it’s the daily operations and attention to detail that truly set us apart.

Q:The flexible workspace industry is a sector that is underdiscussed in the media. How do you see this industry contributing to a country’s national economy?

The flexible workspace sector has evolved significantly over the last 15 years. Initially, flexible office spaces represented less than one percent of the market but globally the demand has increased since 2016. Post-COVID, there were further accelerations as companies started looking for shorter lease terms.

So, COVID completely changed the mindset. The flexible office industry is now coping because we offer the right solution in any real estate strategy, where uncertainties exist. Companies don’t want to or they actually can’t make long-term plans in uncertain times. That’s where we come in, providing a model that mitigates the risk. Clients can scale and pay only as they grow while adjusting to needs as they arise. Flexibility is the key advantage here.

Q:What are your insights on the growth potential of flexible workspaces in Sri Lanka?

The point is Sri Lanka was slow in growth with the economic challenges in 2022. However, lately, we’re seeing many companies, who had paused their expansions over the past two years, increasing their headcount and footprint. Over the years, our centres maintained an average occupancy of 95-96 percent. But if the clients are expanding, that means we might run out of space.

So, we are very hopeful about Sri Lanka’s resilience and strategic location as a hub in the Asia-Pacific region. We look forward to growing alongside the country, as its economy continues to recover.

Q:Let’s talk about your market share. What position does TEC hold in Sri Lanka?

I would say that when it comes to any flexible office space requirement, we’re the first choice. Yes, there is a premium and our services are definitely more expensive, due to the high-quality offerings we provide. In terms of market share, I can safely estimate that we hold close to 35 percent of the flex office space market in Sri Lanka.

Q:Post-crisis, Sri Lanka has seen growing confidence in investments and entrepreneur activity. How do you plan to capitalise on this trend?

We do see a rising trend and our biggest strategy is our thoughtful expansion. Our focus has always been on profitability and we do not want to expand without any solid demand from our clients. Being in operation for 30 years I think we have the right client mix such as IT, travel and offshore companies.

A lot of companies see the potential in the Sri Lankan market and want to establish small liaison offices to support their operations. So, we are seeing demand and while it is not on a large scale, it shows a growing interest.

Q:How do you ensure that the services provided at TEC meet client expectations?

We are very keen on delivering our promises and maintaining our state-of-the-art services because we believe that actual service standards help companies to scale up. Our service model is consistent across countries, from India to Hong Kong, allowing our clients to enjoy the same premium experience worldwide.

As we celebrate our 30th anniversary, we have grown into a company with 50,000 members globally. Our resilience through recessions and challenges like COVID has built strong trust among our clients and that’s the whole reason for our premium positioning.