by Pooja Bhatia
The demand for flexible and co-working spaces will triple in India in the next three years, fuelled by start-ups as well as big corporates. Co-working companies took up 2 million sqft of commercial office space in the first quarter of this year alone, which is more than the 1.8 million sqft they took up in 2017, Knight Frank said in a report recently.
According to a report, Co-Working: The Office of the Future, by Knight Frank India, “Real estate expenses makeup approximately 9-12% of overall operating costs (can differ from market to market) for an established corporate and could account for more in a start-up.”
This is the exact reason why co-working spaces have gained precedence in India. It offers the operational flexibility and is low on budget. Many small co-working office spaces can be rented out on an hourly, daily or monthly basis. Take, for instance, an individual professional or a consultant searching for client meetings space. The individual has an option to take the office space on rent on a per day or per hour basis. The same person can rent out space on a monthly basis at an average cost of Rs 8,000-10,000 a month.
The co-working space demand has been mostly by start-up companies. Since the company is in a mushrooming space, the increased flexibility of flexible desks, fixed seats and even private office suit their budget at various stages of business growth. There is a further option to increase the number of seats or space and pay as per the exact location.
It is expected that the demand for such spaces will only improve in the future. “The potential market size of co-working across India is expected to be 13.5 million users by 2020,” said a research report released on 30 May 2018 by JLL India, a real estate consultant.
The major benefits of co-working space include:
Cost saving- the low cost of setting up an office is the biggest attraction. The operation cost is also considerably reduced as there is no recurring monthly cost.“There is a saving of 5-15% per seat in a co-working space compared to a standard lease,” according to the Knight Frank report mentioned earlier.
Common infrastructure- the common support staff including housekeeping, canteen, reception and other infrastructure facilities adds to the management convenience. This operational expense is shared by all the occupants under the roof.
Flexibility: in addition to time and cost flexibility, there is customisation of reserved office space on the offer. One can book a cabin space, open space or a meeting room depending on the exact requirement. Add the benefit of location, facilities and amenities as per the exact requirement.
Multiple offices: there is the benefit of running offices at multiple locations, in different cities.
So, co-working spaces can be seen as a boon for start-up business which is already growing at a fast pace. Depending on the duration and location preference, the start-up companies have a good deal for them on the table. In addition, the operational flexibility it offers adds to the margins of the start-ups. It is a win-win situation for the real estate sector and the start-up companies who seek a positive growth from the concept of co-working space in India.
Pooja Bhatia is a property news enthusiast, who likes staying updated on business and corporate news, lifestyle at home, home interior elements, location insights and rest of the information, to make living better. She is also an avid traveler (a blogger on holidays) and an avid reader and a part of this real-time information, she converts into real estate