Flexible workspace demand rises, companies seek customisation

The demand for flexible workspaces from large enterprises has gone up multi-fold in the backdrop of the rising acceptance for hybrid work model that emerged post the outbreak of Covid-19 pandemic and so has the preference for customisation of these office spaces.

The entire flexible workspace universe has shifted from a cookie-cutter approach of standard workspace options to a more customised, enterprise solution with a big focus on end-to-end space and amenities management.

This has resulted in the emergence of a distinct managed space operator category within the flex ecosystem, in addition to other operators that are evolving to a more hybrid model to support large enterprises, now creating on-demand, new-age workspaces.

"Flexible space providers service a wide spectrum of industries for their real estate needs, as such they are uniquely poised to use real world space utilisation and customised solutions to enterprises by marrying their unique needs with best practices, design expertise and operational efficiency," said Parul Thakur, senior vice president and business head, CoWrks India.

According to her, almost three-fourth of CoWrks' new business is enterprise driven and the company expects this will account for more than half of its seats over the next year.

"Companies need flexibility and customisation when making an office space," said Robin Chhabra, founder and CEO, Dextrus Workspace. "Coworking spaces offer that flexibility to mix and match to suit their requirements. Enterprise solutions offered by some of these spaces look at catering to longer term office solutions that can avail the benefit of the shared domain as and when required in addition to their private one." This, according to him, creates efficiencies in real estate requirements and hence reduction in real estate costs.

Flexible workspace operators are spending nearly 1.5-2 times more than their traditional fit-out costs as they look to customise flexible office spaces for large enterprises. While occupiers are demanding more customisation, they are also willing to pay a premium for such spaces at centrally located flex centres and this is despite affordability being one of the key factors to occupiers' plans of opting for flex space options.

"Today, large enterprises strategise to have access to fully serviced, new-age and customised spaces over and above savings on the upfront capex required for fit-outs," said Samamtak Das, chief economist and head of research and REIS, India, JLL. "The flex operators have understood the modified strategies of large enterprises and have been quite agile in turning to an enterprise-based model, with some of them working purely on enterprise bespoke solutions."

According to Chhabra of Dextrus that recently set up an office for Harvard Business School at their Lower Parel centre, some enterprise solutions can be large and standalone and the major benefits lie in the prowess of the workspace provider to design and build responsibly, and to manage to a good quality of service. This support takes away the headaches of finding and making an office, which in turn leads the companies to focus on the success of their core business.

In the current scenario, the most dominant offering by coworking players is a per-seat cost of up to ₹10,000 per month. Growth, however, lies in the price segments of ₹10,000 to ₹20,000 per seat per month range, experts said.

Over the last six years, the growth rate of flex seats in the range of ₹12,000 to ₹18,000 per seat per month has crossed nine times, which is nearly on a par with the growth rate of the seats in the lower price range.

Coworking spaces are no longer the preserve of startups and freelancers, as enterprises are also shifting their focus to provide an elevated experience, better design and more collaborative spaces with flexibility for its employees.

This shift towards a flex-based space solution goes beyond the conventional cost metrics. It is now a function of premium amenities and creating future-ready, modern workplaces which allow occupiers to engage their workforce and foster an environment of innovation and collaboration.