Moving Beyond Traditional Hubs; Future Location Preferences For Co-Working Spaces In India
Co-working as a concept began to gain traction in India due to a growing demand from freelancers, entrepreneurs, startups and consultants looking for cost effective office spaces that they could function out of, at a reasonable cost and without the hassle of managing the various components of an office environment. Over time, these very same reasons resulted in co-working or shared offices gaining prominence among established corporates and large enterprises. Apart from the multiple benefits of affordable rents, access to office amenities and the relaxing of long term commitment of owning a space, co-working spaces offered a more fluid work environment which tied in with the new-age concepts of workplace flexibility. These new spaces also enhanced creativity while encouraging collaboration.
From a business point of view, the entire segment of co-working/flexible office space is witnessing spiralling demand across the country, primarily due to rising instances of consolidation, changing workplace strategy, and increasing focus on cost efficiencies by large multinationals and even Indian corporates. Today, large enterprises are finding it more convenient to move into managed workspaces that reduce their overall infrastructure cost and helps them experience new age workplaces with minimal intervention and plenty of flexibility.
As traditional business hubs, tier 1 cities in India have been the first adopters of these new space formats. Currently, Delhi NCR, Mumbai and Bengaluru house most of the co-working stock in India followed by Pune and Kolkata, as per a recent Knight Frank report ‘Co-working: The office of the future’.
According to market research, Bengaluru has the highest number of co-working spaces, not only because of its young workforce but also because of its technology driven environment. Followed by Bangalore, Delhi NCR and Mumbai have the maximum number of shared workspaces. Other cities witnessing this trend include Hyderabad, Chennai and Pune. This is similar to shared offices which burgeoned in Silicon Valley, New York, Manhattan and San Francisco, with early adopters being large companies and startup entrepreneurs. These gateway cities led the co-working trend that later expanded to Denver, Atlanta, Seattle and other smaller cities.
Similar needs are driving the adoption of co-working at India’s financial capital Mumbai while Pune, with its dominant student population lends itself naturally to co-working offices, with graduating students seeking high-class offices to give wings to their entrepreneurial ideas. As the capital of the country and the seat of political power, Delhi is the key hub in North India for co-working spaces.
According to a report by CBRE titled Exploiting the Agile Revolution: Prospects for Landlords and Investors, [2] flexible space operators have grown rapidly in recent years, reaching a total footprint of just under 40 million sq. ft.1 as of H1 2018 in 16 major Asia Pacific cities including Bangalore, Mumbai and Delhi NCR.
All these statistics point towards the fact that the co-working segment across India will continue to expand in the years to come. Apart from core locations witnessing significant demand, over the next two years, we expect other smaller cities that are in close proximity to these business hubs to also see and uptick in demand.
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