The commercial real estate business in India is changing. It is early days, but the business appears to be testing a transition from selling products to selling a service. The rise of co-working underlines this. Start-ups, who need scaling-up or down, led the adoption but now even established corporates have joined in. Apart from the flexibility co-working spaces offer, it is simply less of a hassle - no dealing with multiple vendors, less compliance headaches, and a plug and play setting.
Property consultant Knight Frank India came up with a 'The office of the future' report, highlighting the traction Co-working is witnessing in India. Here are some of its findings:
1. There are about 200 co-working players running an estimated 400 shared workspaces across India today. In 2010, there were less than 30 such centres. The report says that Regus is the most established and the largest shared workspace operator in India today with approximately 2 million sq ft and 20,000 seats under operation. WeWork and CoWrks are among the newer companies.
2. While co-working companies accounted for about 1.8 mn sq. ft. of the 41 mn sq. ft. annual commercial office space transactions volume in 2017, the expansion plans of major players and growing demand is expected to see annual transaction numbers triple from current levels over the next three years.
3. Compared to the 1.8 mn sq ft in 2017, the first quarter of 2018 itself has exceeded the annual tally of 2017. Q1 2018 witnessed transactions to the tune of 2 mn sq ft. In Q1 2018, the highest co-working transaction activity was witnessed in Bengaluru, NCR and Hyderabad markets, which contributed 43 per cent, 16 per cent and 15 per cent respectively.
4. About 50 per cent of the client roster of an Indian co-working operator is made up of big corporates today. A few years back, start-ups, SMEs and the Gig economy workers formed majority.
5. Private Equity players have also been looking to invest in co-working startups, the report says. One example is that of Sequoia Capital that invested $20 million in co-working space start-up, Awfis.