Though the Co-working space in India is, comparatively, a newer concept, it has registered a rapid growth in the last few quarters. It is one of the prime reasons behind the revival of the commercial real estate. Skootr is one such brand which has revolutionised the growth of co-working space. Skootr is the largest co-working player in Delhi- NCR serving more than 75 Indian and international brand. Skootr is also the only profitable start-up in the co-working and managed office space. Here are the excerpts of an interaction with Puneet Chandra- Co-Founder and Joint Managing Director, Skootr where he discussed why it is the only profitable company in its space and the way forward.
As most of the co-working start-ups have failed to reach even the break-even, what makes Skootr special in its category? What benefits an SME or an MNC looking to set up operations in India should look forward to while associating with you?
We are an enterprise-focussed serviced office space provider. The primary difference between us and any other co-working space or business centre is that we are perceived as a permanent office space provider, while others are preferred by companies requiring temporary office spaces.
Any SME/MNC or thriving business needs an office which can cater to its two most basic requirements – accessibility and functionality. Also, setting up office infrastructure locks the company’s capital. SMEs and MNCs understand the point that funds invested into office furnishing do not get justified. Hence, at Skootr we ensure that people consume offices but do not burn their money on furniture.
We believe that with Skootr, we have disrupted the commercial real estate market in India by offering flexibility around workspaces. We set-up bespoke workplaces for customers and make commercial real estate, not just a real estate but an offering coupled with value-added services, partner discounts, community and tech platforms.
We also keep in mind the Indian set-up and preserve the work culture and brand identity of every company while setting up their offices. While other players offer a five or ten-seater cabin for sale, Skootr offers to create an office that is completely customised.
I would like to add here that Skootr is profitable since inception and we hope to grow over Rs 100 crores of revenue by next financial year.
What is the total market size of the co-working sector in India? With India’s improved rankings in the ease of doing business, do you foresee its impact on the overall business and why?
As per reports, India’s co-working market is over a 15 Mn sq.ft. the market as of now and is expected to grow to 50 Mn sq.ft. in the next 2 years. India has a total of over 500 Mn sq.ft. of Grade-A office space, out of which 85 per cent is occupied. It is likely that the percentage of new take-up by a Serviced Office operator will be in excess of 10 to 15 per cent of the overall space consumption within the next year or so.
It is also estimated that 2021 will be the key period wherein a lot of traditional leases will expire and it will be interesting to see how these occupiers react to this new innovation.
Will they continue with traditional leases or they will opt for the flexible option?
I think the answer to this will change the way real estate functions in India.
Though there are market reports that suggest the commercial real estate market is reviving, the office space category is still struggling with 75-80 per cent of occupancy. How well the co-working category has filled in that gap? Going forward, do you expect big names entering into this segment as well?
The price per seat in a co-working space varies from as low as Rs 5,000 per month to premium slots going for Rs 35,000 per month, depending upon the operator and the market dynamics. There are over 600 shared workspaces with over 1.80 lakh seats across the country. The area under co-working spaces is currently around 15 million square feet, as per estimates. The figures indicate that co-working space has made the commercial real estate market lucrative by far and have given a life to bleeding commercial real-estate.
India’s office market continues to perform well, as leasing rose 7 per cent during January-September 2018 to 32.2 million sq ft in nine major cities on higher demand of spaces from corporate and co-working operators for their expansion. The interesting fact is that approximately 3 Million has been consumed by Serviced office companies out of this 32.2M sq.ft., which is almost 10 per cent as compared to 5 per cent during the same period in the last fiscal.
The increase in demand for co-working space has not only boomed the industry but also allowed innovations in the workplace, making an impact on the space utilization ratio. Managed and co-working service space has a long way to go in the industry and will also witness more players joining in the game in the next few years.
There is an increasing trend where big MNCs are experimenting with co-working spaces while looking for branch offices in tier 2 & 3 markets. How good these markets are in terms of business for your category? Do you plan to expand beyond the metros and cater to these cities as well?
While cities like Bangalore, Gurgaon, rest of Delhi NRC, Mumbai, Hyderabad, Pune, Chennai have a vibrant office workspace, Indian innovation landscape is not restricted only to the metro cities.
Tier II and III cities too are standing up to make a difference and name for themselves in the country. With businesses growing in Tier 2 and 3 cities, the concept of office space is embracing even the smaller cities and there is a need to nurture the culture of an office workspace. Especially with the expansion of start-up culture all across the country, the demand for office space will witness a growth trajectory in Tier 2 & 3 cities in the coming years.
In India, co-working will expand faster than a lot of other markets, because there are 600 million people under the age of 35, and a strong GDP growth of over 7 per cent. This enhances the scope of growth in the co-working space in Tier 2 & 3 cities. This is just the beginning.
Please elaborate on the services that you are offering and are in pipeline.
We offer our clients the right mix of permanent space and flexible space, which help them increase their productivity. In addition, we can search an office and make it operational for the client, customised according to their requirements. We provide state-of-the-art office and luxury spaces, flexible timings, 24×7 support services, high-speed internet, concierge support, power backup, multi-city address, as well as cafés for snacks and beverages as a part of its premium offerings. In short, we are also helping companies set-up their head-offices in the cities of their choice.
Skootr brings a highly customized offering for their customer, services in skootr are integrated in a way that it can cater to some of the very unique requirements, like valet services, Japanese food for Japanese companies, butler service, managing events etc.
We have provided our extensive co-working space solutions to a diverse clientele that includes large corporate, startups, SMEs, BPOs and various working professionals. From MNC Companies such as BMW, Erwin Muller, Kuka Robotics, Haba, Luther Corporate Services, Rocket Testtatilor Software, Devere, SevenN, Rational Kitchen, MattsenKumar, to Indian StartUps such as Magic Bricks.com, Beacon Analytics, AstroYogi, ZoyRide, Gaadi.com, we have a diversified base of customers.