Asia’s co-working industry is growing nearly forty percent more quickly than in North America, and at nearly double the pace found in Europe. From 2014 to 2017, flexible space stock across the region recorded a compound annual growth rate of 35.7% in Asia Pacific—much higher than in the United States (25.7%) and Europe (21.6%) over the same period.
India has been an attractive market and you would be aware that over the last few years, both foreign and domestic firms have upped investments into the market, especially in big cities. According to estimates from Jones Lang LaSalle (JLL), demand for co-working spaces and flexible offices is likely to jump by between 30% and 40% in 2018, And by 2020, some 13.5 million Indians will operate out of such facilities. As demand rises, this domain is expected to attract US$400 million in investments in the next one year alone.
However, according to responses to Global Coworking Survey, on an average only 40 per cent of coworking spaces are profitable and growing industry fragmentation driven by the emergence of new players, huge investments, the potential supply and demand imbalances caused by the massive growth, signals that the industry is on the verge of a massive consolidation. This is already being seen in India. The flurry of launches of co-working start-ups has reduced over the last year or two. Today instead we’re seeing more established players from the realty sector embrace co-working in a bid to attract tenants in malls and office complexes. Expansion plans of older start-ups has reduced and new brands are limiting their launches to single centres only.
How is this market going to sustain itself? To what extent can incumbents rent out floor space at hugely discounted rates? How long can they sustain it and what are the issues should customers generally be aware of? Most importantly, is a shake-up of the Indian co-working market inevitable?
Harsh Lambah, India Country Manager, IWG Group is keen to share his thoughts on this and other related issues on a mutually convenient day and time. Harsh Lambah leads the IWG business in India. His professional experience spans 28 years in a variety of industries, from hospitality to international trading to financial services in India and in the United States.
The talk-points for the interaction:
- Understanding the rise of the coworking market in India
- Expected trends for coworking market over the next 5 years
- Reasons for smaller operators looking to exit the business model
- Is the market ready for consolidation?
- How will consolidation help big players?
- Roadmap for IWG’s coworking brand, SPACES?