Coworking spaces have bypassed the traditional office space environment and have been recording a strong growth inthe last few years. The demand has been constantly raising across India witharound 15 million people expected to work out of coworking spaces in the near term.
India’s startup culture, strong economic development factors, foreign players entry into the market and growing SME businesses are the key drivers of growth in workspace sector. As per CBRE research, around USD 3 Billion has been injected so farinto coworking industry across Asia Pacific in the last one year. India is thesecond largest market for serviced workspaces, Bangalore accounts for 38% ofcoworking industry, Mumbai holds 25% and Delhi NCR accounts for to 28% of themarket. While the market has been rapidly growing in the last two years, the coworking sector still averages about 3.5 percent of the total real estateinventory available in the top cities.
Many small, medium and large enterprises will flexible workspaces.
While startups and freelancers have been the early adopters of the coworking spaces, this year may see small, medium and large enterprises moving into coworking spaces. A couple of big names have already moved into coworking spaces, other corporates are following the lead. The core reasons for corporates to look at coworking spaces include the flexibility that these spaces offer to scale, provide an engaging ecosystem for extended teams, a functional partner network to support staff spread across various geographies, lesser commute time for employees, creative and energetic environment to boost productivity.
Sector based workspaces
While all women working spaces have sprouted across the world, the next wave in India will surely be of sector-based coworking spaces. These spaces will be themed coworking spaces, specifically built for particular set of audience and from select industry. These spaces will predominantly cater to the operational and businessneeds of companies in the same sector and try to create a niche in the market .
Coworking Spaces in Tier II Cities will Sprout
While coworking spaces have sprouted across the country on account of affordable, flexible and hassle less spaces that cater to all sort of office needs. Coworking spaces will start shaping up in Tier II cities, while most of this will be driven by startups in tier II cities, it will still take some more time for other corporates to follow the lead and jointhe coworking brigade.
New Large Players in the Market
Large startups/players in the real estate sector will eye on acquiring decently working coworking players in the market. These could also result in consolidations or a larger real estate brand acquiring a geographically spread player. While the consolidation may be just the beginning or for market correction as the industry has just began and a major consolidations will be expected 2-3 years down the line.
SMEs inflow as members into coworking spaces will drive, building of more and more functional and affordable coworking spaces rather than exorbitantly priced dreamland looking coworking spaces. Given the outlook on the economy, a lot of companies will focus on containing their costs and ensuring better employee engagement to sustain and grow businesses.
A large number of local players will sprout, who will establish small and medium spaces across various popular localities in the Tier I cities. Given the current popularity of the coworking spaces and a large number of spaces successfully running at 90+ percent occupancy, will lead to more spaces opening up in various localities.
Landlords Led Spaces
In the past, many large coworking players have worked towards persuading the landlords to work with them on a revenue share model. Given that most of the landlords prefer autonomy and have seen the success of coworking offices, the landlords are interested to try out a portion of their inventory as coworking spaces.
Coworking is evolving year on year, it is grabbing a larger pie from traditional workspace market, this sector is bound to further disrupt and bring a lot of changes in the way the commercial real estate market works. The journey is exciting, we are all geared to go on the long path to reach the best of our mission.