Building A Booming Co-Working Business
As the pace and structure of the work environment is changing, businesses are in search of modern office solutions to meet their changing needs. Realty+ Coworking Summit on Jan 22nd in Mumbai discussed how from MNCs to Startups, the co-working sector is evolving and its challenges.
The work environment is moving towards an experiential flexible format. This demand has given impetus to the co-working segment in India that facilitates flexible formats and collaborative work environment.
Piyush Gandhi, Executive Director, Head – Flex Spaces and Head of Sales, Corporate Solutions, JLL India defined co-working as the quintessential change the real estate industry has seen across the globe. He said, “The concept of shared workspaces has been beneficial for all the stakeholders be it the investors, occupiers or developers. The real estate footprint worldwide grew on an average of 3% per annum. While, in the past 7-8 years, co-working itself has grown more than 23%. Barring the last year’s dip, the growth of co-working has been more than 20% in India.”
Harsh Lambah, Country Manager India, VP Sales – South Asia, IWG concurred, “Originally billed as a perfect working space for millennial, co-working spaces are becoming very popular among the large and even medium-sized businesses for their affordability and easy infrastructure maintenance. It is also a great place to build business opportunities as the occupants come from diverse fields.”
There has been a large scale move towards a new way of working, which has impelled the demand for collaborative workspaces in India. However, to construct a successful co-working business, optimum resource allocation and profitable leasing models are essential.
Amit Ramani, Founder & CEO, Awfis added, “Business centres existed before co-working began. What has changed now, is the ideology. Earlier, individuals would look at adaptable and shared workspaces for short-term use. Today, flexibility is looked at for permanent use. Almost 50% of business comes from large enterprises.”
IS IT BRINGING PROFITS?
In co-working, the road to profitability begins with how a company puts the available space to the best usage and provides a unique experience. Thus, when it comes to mastering this concept, only a handful of companies have got it right.
Rajat Gupta, Chief Growth Officer, CoWrks stated, “The sector has ample revenue potential. Space owners provide customers with a choice of packages, this in turn generates a good return on leasing revenue. In 2019 gross leasing reached an approximate 60,000 sqft. In the past two years we have seen about 8 billion sqft leased from the co-working sector. Co-working is also a worthy solution to the unsold inventory issue plaguing the real estate sector. The market growth potential is more than 250,000 seats every year.”
Azaan Feroz Sait, Founder & Chief Happiness Officer, The Hub Bengaluru added, “Space providers are creating unique packages and deals that cater to every section of the commercial market. Larger companies may not necessarily move to a co-working space, but instead hire a co-working company to come in and manage their existing property. It’s not just about moving towards a co-working facility, it is more of adapting to the co-working ideology.”
CAN TOO MANY COOKS SPOIL THE BREW?
Khair Ull Nissa, Executive Director – World Trade Centre and WTCA Board Member shared “The success mantra of real estate lies in building mixed-used development projects. The focus also needs to shift from capital cities to tier II and tier III cities as a large number of SMEs exist there. Millennial start-ups that want a decent location and swanky workplaces find tier II & III cities to have better opportunities. The work-live-play concept incorporated by flexible spaces is the driving factor. I believe creating a holistic ecosystem is conducive to growth of employees and the industry as a whole.”
Rajeev Suri, Managing Partner, Orios Venture Partners stated, “The biggest aspect of co-working is its impact on real estate. If you are an entrepreneur, customer acquisition has to be accomplished one way or another. The same works with the co-working space providers. Initially it was considered a concept for startups and freelancers, but quickly we have witnessed large enterprises also adopting co-working. In addition, business models need to be adopted which are going to make money. Co-working is an option of growth and expansion.”