Tuesday, August 09, 2022

Shared Office Space: Co-working in India likely to grow 50% in 2017

To reach over 1 mn sq ft of leased alternative work spaces by the end of this year; $400-million investments expected by 2018 in the segment.

Written by Ramesh Nair |
July 22, 2017 1:18:32 am

Shared Office Space, 'Uber-Cool’ and ‘Chic’ workspaces, Future of Work: The Coworking Revolution, coworking spaces , coworking operators in the top cities, commercial office space Co-working spaces, emergence of co-working

By 2025, about 42 per cent of India’s population would be living and working in its urban centers. With this growth in the urban population, there will be a far greater demand for shared workspaces in less than a decade.

Co-working is a disruptive business model that is redefining how we look at the office spaces today. With marginal slowdowns in the global economy and an ever-expanding class of millennials who know what they want, we are seeing workplace reforms in India, where ‘Uber-Cool’ and ‘Chic’ workspaces are becoming the norm. With this paradigm shift, the co-working industry is experiencing tremendous growth as well.

The year 2016-17 saw a massive spike in the growth of the co-working industry and as it evolves further, we will witness an era of flexible office spaces. The first-ever research on co-working in India is a joint product by WeWork, the largest co-working operator in the world, and JLL. ‘Future of Work: The Coworking Revolution’ shares insights on this disruptive trend driving the commercial office segment.

Here are some of the key highlights:

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*Co-working is expected to receive $400 million in investments by 2018 and is set to grow by 40-50 per cent to reach over one million sq ft of leased ‘alternative’ work spaces by the end of the year in India. This presents a huge opportunity for occupiers with easily accessible, affordable, on-demand workspaces.

*The potential market size for the co-working segment across India currently stands in the range of 12-16 million seats. Demand for co-working spaces is no longer only limited to freelancers or start-up employees. Staff at small emerging businesses as well as large corporate offices are also looking to coworking spaces to maximise their productivity.

*There are just about 300 co-working operators in the country operating less than 1,000 centers in urban India, of which less than 100 are branded spaces e.g. Awfis, WeWork

*The occupancy levels for co-working spaces run by a handful of branded operators in India have been touching 100 per cent. In addition, they have been notably breaking even within about five months of launching new spaces.

With office rental costs continuing to rise across India’s business districts, the total space leased by coworking operators in the top cities could potentially stand at nearly 7–9 million sq ft by 2020.

This presents a huge opportunity in the commercial office space Co-working spaces can lead to a 20-25 per cent cost savings as opposed to working in the traditional office spaces The emergence of co-working has led to a fundamental change in attitude towards the traditional office format and we are already seeing the first signs of disruption.

The writer is chief executive officer & country head, JLL India

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