Demand For Co-Working Space To Skyrocket Over Next Three Years, Says Recent Report

India is at the cusp of a co-working revolution. As per a recent report, annual transaction numbers in co-working space will triple from the current levels in the next three years.

The demand for co-working space is continually rising in India. Currently, NCR, Mumbai and Bengaluru house most of the co-working stock followed by Pune and Kolkata. As per a recent report by Knight Frank, there are close to 200 co-working players running an estimated 400 shared workspaces across the country today, as compared to just Regus and few localized players in 2010 running less than 30 such centers.

Presently, co-working companies account for just under 1.8 mn sq ft of the 41 mn sq ft annual commercial office space transactions volume. However, this number is going to triple in next three years owing to expansion plans of major players as well as increasing appetite for this format from occupiers, property owners and co-working operators.

In India, major five co-working players, namely Regus, WeWork, Cowrks, Awfis and Smartworks, have 0.79 mn sq mt (8.5 mn sq ft) operational space; with plans for additional 0.65 mn sq mt (7.0 mn sq ft) by 2020.

While Regus is still the most established and largest shared workspace operator in the country today with approximately 2 mn sq ft and 20,000 seats under operation, several new operators have ventured in this format. While WeWork and CoWrks are among the newest and most aggressive players, it is the co-working space start-up Awfis that saw the investment of $20 million in mid-2017 by Sequoia Capital.

The report further busts the myth that co-working spaces are for quintessential start-up, SMEs and gig economy (freelance) since there exist flexibility of tenure and lower occupancy cost. However, the truth is that the various advantages of such spaces have also got the attention of the more established and mainstream occupier. As per the data, approximately 50 percent of the clientele of an Indian co-working operator is made up of big corporates. This figure can go as high as 80 percent in the more premium priced ones.

The trend is not just limited to India but is seen globally. There are now 18, 900 co-working spaces in the world as compared to just 600 in 2010. Interestingly, the number of people working in these facilities has exploded by close to 8,000 percent,  growing from 21,000 seats to 1.7 mn seats, in the same period.

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