The rise of coworking spaces has been phenomenal

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    The rise of coworking spaces has been phenomenal : Manas Mehrotra, 315Work Avenue

    The concept of workspaces and the way we perceive workspaces strategies have evolved significantly in recent years. Both coworking space and flexible office space have some overlapping characteristics and benefits. “Flexible workspace” is an umbrella term for shared office space that includes a variety of options, including coworking centers, on-demand single desks, executive suites, and private offices. As a concept, flexible workspaces are designed to provide teams and individuals with different ways to work depending on their needs. Coworking is just one of these solutions among multiple forms of flexible working and is at the most flexible end of this scale – with fostering collaboration between members being its major objective.

    Flexible work spaces are on the edge of a transformation as coworking spaces have become a highly popular choice for businesses of different kinds and dimensions due to multiple advantages among a spectrum of flexible spaces. Amid transformations of the office real estate market, it is evident that tech companies are having a significant bearing on office space leasing in India. The rise of coworking spaces has been phenomenal and a significant surge in demand has been observed among domestic companies too, particularly those from the engineering and manufacturing sectors who are increasingly taking up office leasing. 

    The current state of coworking

    The co-working sector has expanded and demand has gained great traction with corporates and MNCs making a beeline to coworking spaces in 2023 that have emerged as strong centres of growth. We saw a lot of companies gaining from the hub and spoke and decentralized model that coworking spaces adopted with the idea of making offices easily accessible to employees and enhance productivity. Bengaluru was among the most preferred locations for flex players for their expansion in recent times.

    Flex space market is growing significantly in size as large deals have doubled since the last few years and are a high share of office space leasing. Enterprises across the board are keen on making coworking spaces part of their portfolios as workspaces now are not merely a transaction between operators and occupiers. What is interesting is that a high degree of customization, dynamic workspace planning, flexibility, on-demand space availability, location, and cost benefits are enhancing demand for office solutions including the emerging peripheral and secondary markets.

    Coworking: The future 

    While coworking spaces continued to perform well in the recent past, we believe the share of coworking in the overall leasing of flex space is set to grow further and the companies exhibiting value added services to the clientele will continue to thrive. Overall, companies are aspiring to keep pace with the economic engine and are looking out for workspaces that meet new office requirements of the changing economy and coworking spaces help them fill a unique void.

    India continues to be the fastest growing flex office market in the APAC region and is set to account for one-fifth of the office market by 2030. The coworking sector’s impact is poised to amplify in the future, driven by the fundamental transformation work dynamics have undergone which is unlikely to revert. Going forward, consolidation of the market on the operators’ side will happen as only robust players would be able to meet the social infrastructure requirements of occupiers beyond the office. Enterprises are looking at amenities, wellness and sustainability and overall community experience. Compared to traditional office spaces and the larger spectrum of flexible operators, coworking spaces offer businesses a more cost-effective alternative with shared amenities and avoid long-term commitments enabling businesses to adapt to changing conditions. Coworking is perhaps the most flexible approach to work compared to managed spaces as they offer greater flexibility in terms of usage.

    Conclusion

    Overall, there are numerous benefits associated with shared spaces, which are drawing the attention of big and small enterprises alike. As we move forward, formulating hybrid working rules and policies that balance business goals with workforce needs would be at the top of occupiers’ agendas. As businesses increasingly shift offices from traditional and conventional set ups to coworking spaces, commercial real estate operators will increasingly lease space to flexible operators and both will grow exponentially and co-exist in a win-win situation. This acceptance and surge will fuel greater demand for flexible spaces in the foreseeable future and is expected to witness a new peak in terms of gross absorption. The demand for coworking spaces is expected to grow at around 15-20 per cent over the next two to three years and if the macro fundamentals remain stable, the growth will be higher. Flexible spaces are becoming mainstream now and coworking players have to innovate to stay ahead in the game. Therefore, it goes without saying that the coworking culture will drive the future of workspaces among the broader flex spaces.

    By Manas Mehrotra, Founder, 315Work Avenue

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