CoWorking Insights & Trends
KUNAL WALIA, FOUNDER AND CEO OF SIMPLIWORK SHARES HIS PERSPECTIVE ON THE FUTURE TRENDS IN FLEXI WORKSPACES IN INDIA.
The flexible office space segment will see a very large revival in demand in 2021 as most organizations have reverted to zero capex investment. The uncertainty around ‘back to office’ has pushed back expansion plans for almost all organizations. Thus, short & medium term office demand has started shifting to this segment. The client does not have to invest large amount of capex and can opt for short-to-medium term leases, which is a huge attraction for most occupiers.
WHAT ARE THE NEW SHIFTS IN THE COMMERCIAL REAL ESTATE?
Within the flexible office space, we expect large enterprise set-ups to do extremely well, as the need for redundancy of office space, along with ensuring compliance for EHS norms, becomes a key differentiator for large occupiers. There are several trends emerging, especially amongst large occupiers.
Hub & Spoke: One of the key factors for employees looking to re-join office, are shorter commute times. This has led to a demand for the ‘hub and spoke’ office model, wherein an occupier looks to spread the number of workstations across a large city.
Delaying New Campus Movement: To avoid large capex spends there is a significant demand for work stations through flexible office providers which offer shorter lock-ins whilst at the same time maintaining complete compliance with EHS norms for the occupier.
“AT SIMPLIWORK WE CURRENTLY, MANAGE OVER 2.7 MILLION SQ FT OF OFFICE SPACE, EXCLUSIVELY FOR LARGE ENTERPRISE CLIENTS. WE FEEL CONFIDENT OF EXPANDING OUR PORTFOLIO TO 5 MILLION SQ FT OF GRADE A OFFICE SPACES BY THE END OF THE CURRENT FISCAL YEAR. WE HAVE OVER 97% OCCUPANCY ACROSS OUR CENTRES AND HAVE PLANS TO AUGMENT OUR PRESENCE IN MUMBAI, PUNE & CHENNAI, IN THE COMING YEAR”
Move towards Grade‘A’: We are seeing an acceleration towards quality office spaces. Specifically, Grade ‘A’ offices that provide key amenities including F&B space, leisure activities etc.
WHAT ARE THE CHALLENGES FACING THE COWORKING SECTOR?
The key requirement for coworking players has been that of GST rationalization. A significant capital is stuck in credits, as this is a capex heavy business and as such, gets amortized over several years. The industry has been asking for certain relaxations in the GST regime, so that the capital stuck due to GST credits can be availed. This will boost immediate business and employment, as the commercial real estate business is a significant force multiplier for job creation.