Major co-working operators leased only 1.2 million sq ft in 2016, which accounted for 3 per cent of the overall leasing volume in our country. More than 50 per cent centres are based in Bengaluru, NCR and Mumbai with 60 to 80 per cent occupancy.
Colliers, in its report on co-working space forecasts that the plan is to lease 8 to 9 million sq ft by 2020. It also foresees that the concentration of co-working space will intensify further in Bengaluru, Mumbai, and Gurugram due to the availability of adequate infrastructure and opportunities for start-ups there.
Apart from the above cities, Hyderabad may also pick up the pace as companies such as Apple, Google and Amazon, have recently taken large office spaces in the city, which will create further opportunities for start-ups and a few SMEs. Among Tier II locations, cities that have a high presence of technology companies such as Pune, Jaipur, Chandigarh, Ahmedabad and Kochi, should also witness the emergence of co-working hubs.
Surabhi Arora, Senior Associate Director Research at Colliers International India says, "As India is still on the verge of witnessing international players' presence, we expect the industry to see much more experimentation regarding amenities and facilities in such establishments. The changing dynamics will force developers/operators to differentiate their products in terms of amenities, offerings and quality of space. We are likely to see more and more strategic alliances between property owners and operators and emergence of newer models. India offers a great opportunity for co-working space operators to profit from rising demand for flexible, innovative and collaborative workspace designs."
Colliers believes that the growth of co-working space poses no threat to property developers. On the contrary, it can capitalise on the high demand for functional, flexible working space.
Indian developers such as K Raheja, RMZ Corp and Embassy Group are some of the frontrunners, who appreciate the opportunities offered by co-working space. According to Colliers Research, a strategic alliance between co-working operators, developers and investors will emerge as a new trend in India in the short to medium term.
"Co-working spaces are improving collaboration and stress free working environment which helps develop an efficient and a "happy", workforce. Not just the international operators, now the domestic players, are taking the concept to the next level as well" says Vaibhav Mahurkar, Director, Office Services at Colliers International India. Co-working also saves 25 to 30 per cent of the total costs for a small enterprise.
In 2016, the information technology (IT) industry represented around 58 per cent of the total office demand in India and 41.6 million sq ft of office space was leased in top nine cities. With millennials representing the largest generation in the workforce and unprecedented focus on new workplace designs, work styles, and work culture; these factors have led to growth of flexible and specialised workspaces.
The co-working industry is mainly dominated by start-ups followed by media, e-commerce companies and a few corporates and multi-national companies.
Currently, co-working operators have a small footprint in India, but they are slowly carving out a significant space in the real estate industry. Although factors such as flexibility, networking opportunity and cost-effectiveness will continue to drive demand of co-working spaces, the need for swing spaces, transitional workspaces and office solutions in multiple locations will further fuel the demand of co-working spaces.