The share of coworking space take-up in the overall office leasing activity in India is poised to rebound to a 15 per cent share in 2021, similar to the 2019 level. By 2022, over 3,000 coworking centres across the country are likely to offer around one million seats.
Savills India in its study on coworking spaces titled ‘Collaborative spaces in a Dynamic World Order’, revealed that coworking in India has steadily challenged the traditional office space leasing activity.
The Covid-19 pandemic has thrown up distinct advantages for coworking space occupiers, such as the cost differential to traditional office spaces going up to 45 per cent and the per seat costs range from ₹4,000 per seat per month to ₹60,000 per seat per month available across business districts of major six cities in India.
The Savills India study further showed that even in traditionally expensive micro markets like BKC and Nariman Point in Mumbai, Connaught Place in NCR and MG Road in Bengaluru, there’s limited office space availability, and occupiers could find coworking desks at varied prices.
The study also showed coworking grew from around 5 per cent share in 2016-17 to about 15 per cent in 2019. “Although the pandemic-related uncertainty has impacted the growth trajectory in 2020 for commercial office markets, it is still expected to contribute around 10 per cent of the overall demand in 2021 and 2022.”
On leasing activity, coworking operators’ leasing is expected to increase by 42 per cent in 2021 at 4.9 million square feet over 2020. Coworking players are expected to take up 3.4 million square feet of space in 2020, an 11 percent share of the total office leasing activity.
Leasing by the coworking segment is expected to see a CAGR of 29 per cent during 2015-2022. India with relatively larger coworking formats spanning about 50,000 square feet, compares well with the world average of 7,000 square feet.
In calendar year 2020, as of third quarter (Q3), Bengaluru and Hyderabad had a combined share of approximately 66 per cent of the total leasing activity in the coworking segment. The overall stock, expectedly, has been highly concentrated in these two cities, and approximately 51 per cent share is expected by the 2020-year end.
Coworking in India has grown from a 5 per cent share in 2016-17 to about 15 per cent in 2019. Although the pandemic-related uncertainty in the commercial office market has impacted the growth trajectory in 2020, it is still expected to contribute around 10 per cent of the overall leasing activity in 2021 and 2022.