09 Jan 2018 13:29 IST

Co-working spaces gain ground

Demand to touch 9-10 million sqft by 2020

Burgeoning demand for fully managed office spaces or flexible co-working spaces in the country in the past few years, has resulted in leasing activity in the space tripling, with 2017 alone witnessing leasing of more than 1.5 million sqft.

The total space leased by co-working space operators is estimated to touch 9-10 million sqft by 2020 from 2.5-3 million sqft at present, as per multiple industry sources that BusinessLine spoke to.

Bengaluru leads with the maximum number of flexible spaces with a 35 per cent share, followed by Mumbai ,which accounts for nearly 18 per cent. And with a 7 per cent share of the total leasing volume in Q3 2017, co-working operators are making their presence felt in the market, says a Colliers International report on India Office Property Market.

New models

Erstwhile ‘business centres’ are now making way for new-age work spaces that are fully managed, flexible co-working spaces that cater to every conceivable need of a millennial workforce, start-ups, freelancers, SMEs, independent consultants and even enterprises.

Workspace is one such new co-working product in the premium space that is scheduled to be launched in Bengaluru this month.

With 65,000 sqft that can accommodate 1,000 people across three floors, Workspace is targeted at Fortune 500 companies, funded start-ups and mid-sized firms.

“Workspace is neither a business centre nor a co-working space, its a premium serviced office space, much like premium serviced apartments,” said founder and CEO, Rahul Agrawal. “We also provide meals from breakfast to dinner to finger foods and beverages, a crèche for working mothers, a salon for quick grooming needs, etc, so our clients can focus on their business without having to bother about anything else.”

He believes that the real estate sector, which lacks transparency, is ripe for disruption.

IndiQube, a Bengaluru-based provider of smart business spaces including co-working, shared and dedicated spaces, has grown from one building in 2015 to 15 buildings, with plans to enter Mumbai, Hyderabad, Pune and Delhi by the year-end.

“The way people are thinking of workspaces has totally changed. Much like 10-15 per cent of the workforce in large corporations are temp staffers, today, organisations are also looking to make their office spaces a variable cost by locating 10-15 per cent of their workforce in co-working spaces,” said Meghna Agarwal, co-founder IndiQube.

Cost factor

Sidharth Menda, CEO, CoWrks, says traditional offices are 30 per cent more expensive to set up and run, because of cost of lease, fit-out, utilities, administration and operational costs. CoWrks has grown from 1,60,000 sq ft with 2,800 members in 2016 to 8 lakh sq ft and 8,000 members now.

Similary, InstaOffice has grown from six co-working spaces with 5,000 sqft and 250 seats in Gurugram and Bengaluru in 2016 to 60,000 sqft and 900 seats across 10 centres including Delhi. “A large part of the co-working market is focussed on serving the existing demand from start-ups and SMBs. However, a significant part of the traditional lease market will start moving to co-working spaces to tap the latent demand in the market,” believes Vikas Lakhani, co-founder, InstaOffice.

Late last year, Nimitaya Group launched GoWork with 8 lakh sqft and a capacity of 12,000 seats in two offices in Gurugram.

Attracted to the prospects of the fast-growing segment, WeWork, a global firm, also launched its first co-working centre in Bengaluru, followed by two more centres in the city and one in Mumbai, providing for a total of 4,400 members in India, where 40 per cent hail from large enterprises and SMEs.

There are 350 shared office operators in the country, spread across 800 locations, mainly present in the ‘business centre’ and ‘co-working’ space format, as estimated by an IndiQube study.