Co-working spaces, a relatively young concept in India, aren’t just going mainstream now, they are getting all trendy.
Having gathered pace particularly over the past two years, such facilities are now quickly evolving in the country by differentiating themselves with new-age amenities like cafes and recreational corners, besides even providing career assistance.
This is besides the conventional advantages that co-working spaces are known for, such as lower costs, fewer logistical hassles, and flexibility.
India now has nearly 1,000 co-working spaces, data from a recent report by consulting firm Bain & Company and the Indian Private Equity and Venture Capital Association (IVCA) showed.
“Co-working office spaces are offered at lower rentals, (provide a) more flexible work environment, and save operational costs,” Adarsh Narahari, secretary of Bengaluru’s Confederation of Real Estate Developers Association (CREDAI), told Quartz. “Also, the lock-in period is less compared to the conventional office spaces.”
Half-a-dozen executives from the sector that Quartz spoke to estimate that operating out of a co-working space costs up to 30% less annually than working out of conventional office spaces.
Aside from cost-saving, “there’s a ton of administrative hassles that are taken up by the management of these spaces. This allows the businesses to focus on what’s most important—their work,” said Varun Chawla, co-founder of co-working space provider 91springboard.
Welcome one, welcome all
Initially, the co-working boom was fuelled by the country’s burgeoning startup ecosystem.
Bengaluru, the city with the world’s third-highest number of startups, also has the most number of co-working spaces in India. Mumbai, the country’s financial capital, comes second.
The leasing of co-working spaces more than doubled in Mumbai to 550,000 square feet in 2017, up from 160,000 sq ft in 2016, according to real estate analytics firm CRE Matrix. During the same period, Bengaluru posted a 43% jump to 1.15 million sq ft from 770,000 sq ft.
In metro cities like Bengaluru and Mumbai, “the higher real estate costs as well as the initial security deposits, which work out to be up to 10 months of monthly rental,” make co-working a far more favourable option, explained Mishu Ahluwalia, founder and CEO of Gurugram-based co-working space GoHive. “Another important factor is that traveling within these cities is tough, and hence most companies are trying to find conveniently located workspaces.”
However, freelancers and startups alone aren’t the driving force. Adoption by corporates has been equally, if not more, impressive.
“Forty percent of our current revenue comes from corporates, 40% from SMEs, and 20% from freelancers and startups,” said Amit Ramani, founder and CEO of three-year-old co-shared-workspace provider Awfis. ”The presence of a relatively younger workforce is one of the factors behind this as organisations are continuously working towards establishing a flexible and collaborative environment for their employees.”
And the sector is only going to expand further. India’s co-working market is set to garner 13.5 million users by 2020.
“It started off with the concept of incubation and now has risen to the level of premium and managed offices with a host of allied services” for a burgeoning “millennial clientele,” said Sudeep Singh, chief evangelist and CEO of Gurugram-based GoWork, which runs one of the world’s largest co-working locations with 12,000 seats.
Companies in the sector are turning their focus to differentiation, offering amenities like gyms, sports courts, crèche facilities, meditation zones, and more. “In fact, many brands are even tying up with clothing and wellness brands to attract the millennial professionals,” said Singh. GoWork itself has launched GoSocial, an in-house all-day café and bar, and is soon introducing GoLiving—a sleeping pod concept.
Many of the spaces also offer mentorship and networking opportunities. “Corporates with small teams want to reach out to potential customers such as startups and SMEs working from them,” Singh added. “Even IT companies experimenting with technology want their workforce to be in proximity to startups to understand their needs closely.”