Upgrading real estate and transforming them into efficient and beautiful workspaces
Dr Ritesh Malik, Founder & CEO, Innov8 speaks to Sreyasi Maity, about their new year targets and their partnership with OYO.
How has Innov8’s growth been so far in India in 2019, and what are the targets for the year?
Innov8’s journey commenced in 2016 when we launched our first co-working space in Connaught Place. From a 105-seater office space in the heart of New Delhi to 18+centres, 8000+ seats across 7 cities in India, Innov8’s growth seems to be on the right track for growth.
Post we joined hands with OYO in July 2019, Innov8 as a part of the larger OYO Workspaces family has grown substantially with an equal focus on customer service and growth at the same time.
Currently, we have a razor sharp focus on upgrading various forms of real estate and rapidly transforming them into efficient and beautiful workspaces. Recently we unveiled our first-ever centre in Navi Mumbai – Innov8 Coworking Fairmount. It’s an aesthetically designed 700+ seater workspace with ergonomic design that induces productivity and comfort. With stunning views of the Arabian Sea, Innov8 Fairmount cultivates an inspiring work environment for Navi Mumbai’s entrepreneurial community.
Recently we also announced the opening of our beautifully designed Innov8 Connaught Place 2 centre. Located in the heart of Delhi, Innov8 Connaught Place 2 campus is built in the iconic Regal building, considered to be one of the most popular business locations in the capital city. This is Innov8’s second centre in CP and has a capacity of over 200+ seats.
In September, we also announced our entry in Hyderabad with our first Innov8 centre in the city. Spread across 700+ seats, Innov8’s Hyderabad campus in Gachibowli is a beautifully curated workspace in an industrial design language. OYO Workspaces currently hosts employees of brands like Swiggy, Paytm, Pepsi, Nykaa, OLX, Lenskart, Yulu Bikes, Airbucks India, amongst others. Continuing with this momentum, OYO Workspaces aims to expand its presence to over 20K seats across India by the end of 2019. We are now looking at moving to newer heights, and are aiming to become the most preferred coworking space in India.
How do you think this partnership with OYO will give you an upper hand over your competitors?
Given OYO’s deep real estate and market intelligence coupled with rich experience of onboarding properties, transforming and upgrading them and creating value for customers, we have a lot of learn from them through this partnership. OYO has brought a lot of value for us, both from supply negotiations to transformation scale, procurement & sales efficiencies. Post our announcement in July 2019, we have received an overwhelming response and we expect to keep setting new benchmarks for the industry. We strongly believe that OYO Workspaces will transform the coworking industry of our country.
Please elaborate on the process of setting up a Co-working facility & the type of association with property owner or developer.
We at OYO Workspaces reduce the hassle for companies both big and small, looking for an amenities rich space for employees to work out of while optimising manpower and costs. This is possible through our relentless focus on quality, affordability, technology and leveraging the synergies and learnings from our existing businesses. We identify suitably located workspaces, acquire the lease and then develop the workspace end to end from designing interiors, marketing, business development, maintenance, housekeeping and operations, all in record time with the help of proprietary tools and technologies. This is unlike most other players in the market, who typically don’t have an end to end inventory control and management.
Our objective is to ensure we are able to onboard a building at a lease value that benefits the lessee, creates incremental value for the property through extensive transformation works undertaken and finally optimises costs for the customer (business, independent professional) while providing state of the art amenities.
Brief on the popular business model for the co-working space providers and why.
Before taking an organized shape, the concept of shared workspace existed in the form of cafes and pubs which allowed their loyal customers to sit and work for as long as they needed. However, the need for structured services and support system, offered by regular office space, coupled with amenities and flexibility gave rise to the modern-day dedicated shared office companies we see today.
One of the major reasons for this demand is that a shared space offers businesses the flexibility to shrink or expand as per their requirement without worrying about the space and thereby improves operating efficiencies. Initially, when we started with our first campus in CP, we spent a lot of time and effort educating people and potential clients to understand the business model and what we bring to the table. However, the industry has evolved drastically in the last couple of years.
With the emergence of the start-up culture, demand for office space has seen a significant rise in the last few years. India has one of the highest office space requirements in the world. The total annual office space absorption in India stood at around 41 million sq.ft. in 2017. The Indian coworking industry is undergoing significant growth. Many of the multinational brands are now increasingly opting for co-working spaces. The recent CBRE report stated that flexible working space saw a 277% jump in the first quarter of calendar 2019. While there is still scope to meet this huge demand, basis the tremendous response we have received, we are optimistic that its potential for growth in the future is immense.
What are the various packages an individual tenant and a corporate tenant can avail?
In terms of the pricing, we have different packages for different centres depending on the location and the space requirement. However, our starting price points are as affordable as INR 7999 & INR 6999 per seat respectively for a dedicated desk. Additionally, we’ve also recently launched our Flexi pass at INR 2,999/- per month and a day pass at INR 600/- per hour for a hot desk or a meeting room especially for freelancers, student entrepreneurs which is applicable across OYO Workspaces centres.
Apart from private offices, multiple meeting rooms and dedicated spaces for large and small companies, Innov8’s amenities include access to a library, high-speed wifi, complimentary tea, coffee and printer services round the clock, break-out zones, gaming and recreational spaces as well as a multi-cuisine cafeteria.
Over and above these, we have customized packages for our clients as each client’s needs differ in terms of design, location, seating requirements, etc
What are the financial risks associated with the co-working business model?
The biggest financial risk for any co-working business model will low occupancy which can occur due to poor services or inability to provide value for the customers (business, independent professional) while providing state of the art amenities. That’s why, we remain fully committed to learning from our customers and providing them with what they need – be it small or big, with a big focus on making it affordable thereby providing value to customers and creating value for their businesses.
In future, how do you see the synergy developing between the developer, co-working provider & the end-user?
The real estate sector has had its share of ups and downs in India. However, in the last decade or so, with the emergence of newer models such as co-living, co-working and hospitality players fueling the growth with new opportunities, the real estate industry is definitely showing major signs of improvement.
The co-working spaces are becoming very popular among the large and even medium-sized businesses for their affordable infrastructure and business opportunities. India becoming the third largest startup hub in the world and the second largest freelancer workforce in the world, there is a huge potential demand for co-working spaces in the country. According to a recent CBRE research, $3 billion has been injected into coworking spaces in APAC in the past four years. This gives India an immense potential to tap the disconnect between the demand and supply of quality working spaces. There is a large addressable market and a unique opportunity to unlock latent demand for flexible and serviced offices in an increasing population of a mobile workforce.
This is where co-working or shared flexible workspaces as a model provides immense value to the customers. With the rise in demand, the co-working industry has responded enthusiastically by offering a bouquet of services and features that make coworking a preferred option for not just start-ups or freelancers, but also for established corporates and entrepreneurs. While there is still scope to meet this huge demand, basis the tremendous response we have received, we are optimistic that its potential for growth in the future is immense.
What are the key trends driving co-working culture in India?
Indian work culture is undergoing a major transformation. The emergence and growth of entrepreneurship in India have made way for more flexible and vivacious workspaces that are ergonomic, beautifully designed, and far more inspiring than the archaic office structures.
By virtue of the business model, the co-working industry offers a heap of services and customization options – flexible passes, multi-city access and bespoke plans that ensure hassle-free, end-to-end office requirements. The sluggish economy is also making companies look for office spaces that offer more for less. Also, the rise in demand for coworking spaces is increasing competition in the market, which is ultimately benefiting customers.
Earlier coworking was considered as an option for start-ups or freelancers, now even corporates prefer coworking spaces as they entail flexible lease terms and lower deposit requirements. For instance, big companies like Swiggy, RBL, Vice Media are working out of OYO Workspaces.
Another important point here to consider is – As the millennials are dominating the workforce population in India, it has led to a rise in expectation of having plush amenities such as break-out zones, ample parking spaces, in-house cafeterias with multi-cuisine options, regular engagement events, dedicated meeting rooms, a combination of covered and open spaces at their workplaces.
Last but definitely not the least, with increasing traffic in metropolitan cities and longer commute times, co-working spaces offer easy mobility and increased the access that becomes a critical factor in attracting and retaining top talent for organizations of all sizes. And there is no denying that a great looking, highly functional workspace that promotes idea-sharing, better networking opportunities and increased flexibility helps in building a great work culture. This makes the coworking model a gamechanger in today’s war for talent.
I am absolutely optimistic that the co-working phenomenon is here to stay and grow. While the basics of affordability, design and flexibility will largely remain the same, every player will have to try to offer a little more than the others in order to stay competitive and attract more customers.