Co-working companies on expansion mode as demand climbs

Co-working spaces are seeing an unprecedented boom in demand, as India Inc increasingly embraces flexible working models in a post-pandemic world, driving the operators of the facilities to go on an expansion spree.

Occupancy rates at coworking spaces have now shot up to 90-100%, compared with 45-60% a year ago.

Industry players including WeWork India, 91Springboard, Smartworks, Incuspaze, Dextrus, Synq.Work and IndiQube have chalked out aggressive expansion plans, in metros as well as smaller cities. Demand, they say, is coming in from startups, SMEs, large enterprises and multinationals.


India ahead in adoption curve
According to a recent survey by real estate consultancy CBRE, 73% of office occupiers in India are evaluating hybrid working arrangements, compared with 52% across Asia-Pacific.

"Organisations becoming location-agnostic, reverse migration, distributed workforce and the emergence of work near home are some of the factors that have accelerated the widespread acceptance and adoption of flex spaces in metros and tier-1 and -2 cities, as companies look for hybrid, cost-effective and agile business solutions," said Karan Virwani, chief executive, WeWork India.

WeWork has already signed three new deals this year with brands such as Simple Energy and MSD for 74,000 sq ft, Virwani said. It plans to expand to 13 new locations, adding 1.5 million sq ft in the six cities it is currently present in, by end-2022.

At Smartworks, many clients have signed multi-city deals, and some also want to enter tier-2 cities, said cofounder Harsh Binani.

Smartworks aims to expand from 7 million sq ft to 10 million sq ft in FY22-23 and increase its reach to 2-3 additional tier-2 cities. "We have signed up Accenture, Delhivery, Zomato, Groww and CueMath in recent months," added Binani.

Demand beyond metros
"While the interest is pretty high in metros, the demand from smaller cities increased drastically post pandemic," said Sanjay Chatrath, managing partner at Incuspaze. Last year, at this time, it was operating at an occupancy of 45-46%, which has now gone up to 90%.

"Inclination of large-scale enterprises for managed workspaces is higher than startups for us, given that this is a great way for them to expand in smaller cities. Vodafone Idea, Airtel, HDFC and White Hat Jr are some of our most recent clients," added Chatrath.

IndiQube, which currently has a pan-India portfolio of 5.5 million sq ft, plans to reach 10 million sq ft in 25-plus cities by end-2023. "The growth will be propelled by deeper penetration into key micro markets of existing metros, coupled with expansion into tier-2 cities," said cofounder Rishi Das.