New Delhi, Sept 11: Co-working operators are opening new centres to tap rising demand for flexible workspace and their share in the overall office space leasing jumped to 20 per cent during January-June, according to Anarock.
In April, real estate consultant Anarock entered into this segment by acquiring 75 per cent stake in myHQ, a booking platform for co-working spaces, in a cash and stock deal of around Rs 125 crore. MyHQ, which is headquartered in Delhi-NCR, has over 50,000 subscribed members.
As per the data, the total net absorption of office space across seven major cities stood at 20.8 million square feet in the first half of this calendar year. In this, the share of co-working spaces stood at 20 per cent.
In H1 (January-June) 2021, its share was just 6 per cent of net office absorption of about 9.33 million square feet.
Corporates are preferring co-working centres, which include managed office space, to cut capital expenditure and enjoy flexibility in scaling up or down their businesses.
If we look at city-wise breakup, the demand for co-working space is the highest in Pune, as the share of flex space was 45 per cent out of total net leasing of office space of 2.55 million square feet.
In Bengaluru, the net leasing of office space stood at 6.1 million square feet in the first six months of this year. The share of co-working space was 23 per cent.
Share of co-working spaces stood at 15 per cent each in Delhi-NCR and Chennai, out of total net leasing of office space at 2.75 million square feet and 1.85 million square feet, respectively, in these two cities.
In Mumbai Metropolitan Region (MMR), the net leasing of office space was 2.9 million square feet, of which 11 per cent was contributed by co-working players.
Hyderabad witnessed 4.25 million square feet of net leasing of office space and co-working share in it was 13 per cent, while Kolkata saw leasing of 0.4 million square with co-working share of 14 per cent.
In contrast, the share of IT/ITeS sector declined from 49 per cent in H1 2021 to 36 per cent in H2 2022. However, this decline is largely because many IT companies are now also preferring flexible spaces to regular office spaces.
On the growing demand, Anarock Chairman Anuj Puri said: “Coworking has received a major boost after Covid-19 disrupted the previous status quo. A major factor driving demand is that these spaces are not concentrated in just the city centres or major employment hubs; they’re spread across different areas, including the housing-intense suburbs.”
He noted that coworking spaces are also operating out of malls and hotels across cities now.
“Many large office parks are also housing coworking spaces. This helps companies to remain closer to their employees and offer them flexibility,” Puri said.
In the co-working centre, the consultant said that companies can plug-and-play at the same cost rather than wrestling with office layouts and fit-outs.
“The lock-in period for taking up a regular office space is anywhere between 3-4 years. All these factors have also helped boost the demand for co-working spaces,” Anarock said.
WeWork India, Smartworks, Awfis, CoWrks, The Executive Centre, Skootr, Simpliwork Offices, IndiQube, The Office Pass, 91Springboard and 315Work Avenue are major players, among others, in the coworking segment that includes managed office space.
Recently, Smartworks said it expects nearly three-fold jump in its revenue this fiscal to Rs 1,000 crore. It intends to increase its portfolio to 10 million square feet by the end of this fiscal from 7 million square feet currently.
The Executive Centre’s revenue rose 7 per cent to Rs 289 crore last fiscal and it will invest Rs 50 crore to open four new co-working facilities this year.
Hong Kong-based The Executive Centre (TEC) entered India in 2008 with its first property in Mumbai. It currently has over 30 centres with a total area of about 1 million (10 lakh) square feet across major cities.
Similarly, other players too are expanding their portfolio by taking on lease premium office space from real estate developers or property owners and then further sub-leasing to corporate clients as well as individuals. (PTI)
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