Co-Working space leasing in India is expected to touch 10 MN after by 2020 with the concept of shared office space fast catching up in India.
According to CBRE, demand more than tripled in 2016 to touch 0.7 mn. sq. ft. as compared to 2014.
Further this year the leasing is expected to cross 1.5 mn. sq. ft with 75% of these centres spread across Bengaluru, NCR (Delhi,Gurgaon and Noida) and Mumbai . Each of these centre have more than 100 shared office spaces followed by Hyderabad, Chennai and Pune.
“Occupier focus on business operations over RE decisions, increasing occupier awareness ofco-working as an alternate option, the rising acceptance of ‘remote’ working and an increased preference towards flexible leasing terms will be factors that will drive demand for co-working spaces in the times to come., said Anshuman Magazine, Chairman, India & South East Asia, CBRE.
Shared office spaces fall into 3 categories – traditional business centers, co-working spaces and incubators/accelerators.
Cost saving in co- wiring space as compared to a conventional space leasing is largely driving the growth in this segment. In the larger cities of Delhi, Gurgaon, Bangalore, Mumbai and Pune, for instance, cost saving is anywhere between 10% – 25% when choosing a co-working space over a traditional office space.
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE South Asia Pvt. Ltd. said, “With domestic and international corporates focusing their expansion strategies on cost efficiencies, optimum business operations and space utilization, co-working is not only changing the dynamics of office spaces in India, it is also defining the corporate culture of the future.”
According to CBRE Research, currently, there are close to 350 shared office operators present in India, spread across 800 locations in Tier 1 and Tier 2 cities. There are more than 20 international operators in the shared officesegment in India, mainly from APAC, USA, UK and EMEA.
Initially co-working spaces were focused on providing solutions for entrepreneurs and startups who had constrained budgets for their office setups. “benefits that such spaces offer – affordability, negligible capex requirements, efficient space usage and flexibility to expand and contract at short notice, the concept is now catching up with established corporates,” said Chandnani.
According to CBRE, the next few years, with office rents continuing to move up across India, the total space leased by co-working operators in tier 1 and tier 2 cities could touch 6 – 10 mn. sq. ft. by 2020.
(source by:-The Economic Times)