BENGALURU:
SmartOwner Capital Growth Fund, a real estate alternative investment fund, has put in around Rs 30 crore in a Co-working operator
Workspace, its maiden investment in this rapidly growing segment.
The funds will be used to build co-working space spread over 500,000 square feet in Pune with a target internal rate of return of 24%. “It is a structured investment made to develop a co-working project,” said Vikram Chari, founder of SmartOwner, an investment firm. “Coworking as a segment is growing rapidly but as an investor asset class there are very few projects.”
India’s booming start-up sector has opened up huge demand for co-working space, driving business for companies such as
WeWork, CoWrks, Smartworks and
Awfis Space Solutions, which are expected to double their capacity in the coming years.
Separately, the fund launched earlier this year focused on top eight cities in the country, with a special emphasis on the fastest-growing markets. The Rs 1,000 crore fund has an average investment maturity period of 3-3.5 years.
Some players who entered the market later – such as WeWork, CoWrks and Smartworks – are now looking to raise capital to fuel their growth plans.
As per a recent CBRE South Asia report, India is leading the growth in collaborative office spaces across the Asia-Pacific region. The stock of flexible space in India increased from to nearly 15 million square feet in the third quarter of 2018 from about 10 million sq ft in 2017. The share of flexible spaces in total office absorption doubled to about 10% during this period.