New Delhi: Suppliers of co-working facilities in the National Capital Region are looking for areas such as Old Delhi, West Delhi, New Gurgaon and the Noida Expressway to expand as most of the spaces in the central locations are occupied.
Delhi, which contributes 20% to office stock, witnessed a twofold increase in net office space absorption in 2019, with some prominent large projects added during the year, according to international property consultant JLL. The net absorption, which touched 10.82 million sq ft, was the highest ever for a year.
“In the coming years, we are looking to go to district centres in Delhi-NCR and plan to have co-working centres in Old Delhi and West Delhi. Since companies which look to save cost opt for co-working, we take spaces which are closer to metro stations so that employees can reach easily,” said Ankur Gupta, the founder of Delhi-based ABL Workspaces, which currently has nine centres in Delhi-NCR.
Co-working space has massive demand, ABL said, citing data from the second quarter of 2019 when it said the growth was 23% over the year-earlier period in the top seven Indian cities.
“Ever since the advent of co-working spaces around 2012, the industry has witnessed massive growth over the years. It has revolutionised the way work is done, not just for startups or freelancers, but also MNCs who are now looking for co-working spaces that fit their needs,” said Sparsh Khandelwal, the founder of Stylework, a Delhi based co-working startup. “About 13 million people are expected to work out of co-working spaces by 2020, making India the second largest market for flexible workspaces, second only to China,” he said.
JLL in its annual report said the concept of managed office space was gaining prominence in which the operators were tying up with companies and providing them end-to-end solutions right from searching the property to managing the office. According to Amit Ramani, the chief executive and founder of co-working facility operator Awfis, the sector had not only disrupted the startup ecosystem but also the commercial real estate sector at large.
“Co-working space providers have moved beyond the conventional assets domain and have now entered malls and hotels, thereby aggregating unused spaces. Numerous players emerged in the segment, allowing consumers to choose from a wide range of options offering distinct amenities and facilities at affordable price points,” said Ramani.
In Delhi-NCR, the supply of office space surged two-and-a-half times on the back of some large projects getting completed, such as DLF Cyberpark. Gurgaon garnered a 67% share of the completions while Noida accounted for 33% of the new supply. Prices remained stable at Rs 77.80 per sq ft per month.
According to property consultant Anarock, after the global WeWork debacle, India’s co-working boom came under closer scrutiny. Data by Anarock showed that office supply in 2019 had risen 13% from the previous year to 43.3 million sq ft. Absorption had seen 11% growth in 2019, to about 37 mn sq ft and thereby reaching the 2015 levels.
Vacancy levels have come down from 14.6% in 2018 to nearly 14.3% in 2019 (vacancy was as high as 16.5% in 2013). Large Indian cities will witness strong office absorption along with rising supply pipeline in the coming years, according to industry experts.