Interview with Amit Ramani, Founder & CEO of Awfis Spaces Solutions
Awfis Space Solutions Pvt. Ltd. Or ‘Awfis’ is a new-age venture providing ready to use, plug & play, Pro-Working office spaces, embedded with the latest technology solutions for flexible and ‘Just in Time’ space utilization. Awfis is the largest player in co-working spaces in South-Asia and the second largest player in India when compared specifically with business centres.Amit Ramani – Founder & CEO of Awfis Spaces Solutions talks with Realty Plus about the company and the co-working industry prospects.
How is the co-working industry growing in India?
The concept of co-working space is becoming increasingly popular and absorption of such spaces have doubled since last year. The commencement of 2017 expected this segment to grow by 40-50% to reach over a million square feet and by next year the industry is expected to receive $400 million in investments, as per a recent JLL Research Report. This indicates the growing demand for the concept and to address this, shared workspace operators are now expanding at a rapid pace and are fundraising from investors.
Flexible spaces are a proven disruptor that meet the expectations of corporates, SMEs and freelancers in terms of scalability, cost saving and are gaining efficiency in business operations. With current trends coming into play, we expect this sector to grow by 10-15% in the coming quarters. Awfis has witnessed the fastest growth in a span of two years; every year we are growing by 300% in terms of number of seats.
Which sectors are the major markets for co-working industry? In which sectors do you see most of the opportunity for co-working industry?
The co-working concept is gaining ground across top cities in India. Metro cities like Bengaluru and Mumbai have the highest absorption of shared working spaces in India with 35% and 18% share. Occupancy levels in these spaces are on the rise from large corporates due to cost efficiencies where companies can save up to 25-30%.
Corporate employees are now occupying desks at shared office spaces, traditionally a refuge only for freelancers, start-ups and workers in the creative sectors seeking companionship.
Essentially, demand for co-working space has been driven by the growth of creative and tech industries. However, mobile technologies and personal devices have made working remotely from a variety of locations much easier for employees across industries. Today the spectrum is vast with large corporates across sectors ranging from IT, Education & Training, Tourism & Hospitality to Financial services, all leveraging shared economy spaces for their employees.
What are your working models? How do you cater the needs of the office space buyers?
With the advent of shared working spaces, India’s workspace market is undergoing dynamic changes across cities. Flexibility taking a centre stage, co-working spaces are moving forward towards becoming the workspaces of future. It is one of the fastest growing segment in the commercial real estate space in India. With the rise in the millennial workforce, many more occupiers are seeking non-conventional, flexible solutions. Keeping pace with this growing trend, Awfis has become the preferred choice for office goers and developers across the country.
The goal is to operate, manage, service and power 250K seats or 25 Million SFT in next 3 years making Awfis the largest landlord in India without directly leasing any space. The space ultimately will be free with users only paying for service where space is only a small part of the complete eco system that is underwritten by alliance partners to access the mind share of Awfis community of workplace users.
In addition to the conventional office spaces, Awfis has on offer Mobility Solutions for users:
Awfis Mobility Solutions are a range of product solutions aimed at enabling the professionals to work seamlessly from anywhere.
The range of solutions in this product suite has been designed to cater to the basic need of ease of doing business, for organizations – small or large. The solutions start at 1,499/- and the pricing goes up depending on the kind of solution and duration opted for. Offerings include:
Awfis Roaming, a flexible solution where a business can sign up for a package of visits to any of the Awfis centres pan country. This solution is transferrable within the teams.
Bulk Meeting Hours, allows professionals to pre-book meeting rooms, within the option of hours chosen and can be transferred amongst team members for use at any of the Awfis centres in the country.
Virtual Office, which allow businesses to sign up for call and mail handling services, managed by Awfis for them from their preferred centre across the country.
What are your growth plans when you see competition from global players like Regus and WeWork?
The workspace sector in India as of now is clustered and unorganised comprising of a mix of global players, business centres, and smaller co-working companies. Awfis will continue to keep abreast with the dynamic environment and cater to the changing needs of the customers. The companyhas charted its growth strategy of having its centre within a 10 minute driving radius in each of the key metros. We plan to establish 100+ centres with 35,000+ seats across Mumbai, NCR, Bengaluru, Chennai, Hyderabad, Kolkata, and Pune in the next 12-18 months.
How are you utilizing the recently generated funds?
The Sequoia funding have fuelled the expansion of our operations. It will help us add about 75 – 80 more centres to our existing offering.
Sequoia believes that Awfis is playing on two significant global trends – sharing economy and communities. This being delivered through a superior user experience at a lower total cost makes it more exciting for them.It will also allow us to reach about 25,000 odd seats and around 100 centres, which will include the 12,000 that we have today.
Are you planning further to expand in Tier II cities?
Today we are seeing a transformation in the workspace market where conventional office users have started changing and moving towards the shared office infrastructure. At this time, we intend to be a shared spaces provider which offers a work place solution within a 10-minute radius across the key metros and tier I cities.
We are also adopting a geographical or location based approach. We aim to build a cohesive network of Awfis centres, at prime business hubs and sub-hubs in major cities to allow people the choice of working near home. Keeping this in mind and the demand for shared working spaces we are exploring expansion to tier II cities.
What is your pricing policy? How have you priced the centres in different cities?
Every micro location has diverse pricingwith the modelbased on rentals as the key variable impacting rates. The pricing model has been built based on in-depth study involving comparison with existing real estate and people costs.
Say, if an organization is looking at 50 -100 people taking up space, Awfis will estimate how much they will spend and the endeavour would then be to save 25-30% of that cost for the company.
Awfis also has a proprietary pricing algorithm; this empowers the teams to price the product additionally in sync with the utilization of the centre,which could translate to higher discounts at lower occupancy placeson the rack rates.
What revenues are you generating? Are you achieving profitability?
All Awfis centres achieve operational breakeven within 3 months of launch and all centres which are in operation forover 180 days are highly profitable.
What is your occupancy level in different cities?
While there could be a slight variation in intra and inter-city centres, the average occupancy across all centres stands at 90-95% within 180 days of launch.