India's co-working industry is growing at a break-neck pace with not just start-ups but also enterprises adopting flexible working. According to some accounts, there are over 300 co-working operators in the country. Real estate advisory company CBRE states that India's overall stock of flexible space increased by about 50 per cent, from 10 million sq. ft. in 2017 to about 15 million sq. ft. by the third quarter of 2018. The take-up increased 277 per cent to about 2.9 million sq. ft in the first quarter of 2019, over the year-ago period.
There is consolidation brewing - the market, certainly, cannot accommodate 300 operators.
Business Today recently spoke to Harsh Binani, Co-founder, of Smartworks. He says that the long tail will not be sustainable. However, few of the larger players will continue to grow aggressively and garner more market share. Smartworks started three years back and has been able to scale-up. The co-working company manages 22 centres totalling about two million sq ft. currently. It has plans to grow ten times this number.
Other prominent players in this space include multinational WeWork and developer RMZ Corp's CoWrks. Both these companies are expanding aggressively - a recent report in the newspaper, Mint stated that CoWrks was looking to raise $350 million equity to fund domestic and foreign expansion.
Here's what Binani had to say about the co-working market and why Smartworks has been able to scale-up.
He added that the company has been able to manage lower input costs. "The capital expenditure on fit outs and the operational expenditure on running the centre both are critical in determining the selling cost of seats. We have optimised these expense heads. We use standardised brands in fit-outs - like Daikin for air conditioners - but because of our large scale, we can directly deal with manufacturers. We have been able to cut down the price of fit outs to a great extent," he said.