Will Co-Working continue its golden run in the future?
The chief reasons behind the growth of the coworking spaces in India can be attributed to the rise in the startup community in India, followed by steady economic growth. India has emerged as the second-largest flexible workspaces market in the world, next only to China. The coworking space in India has seen an influx of $3 billion in APAC in the last four years, according to CBRE.
As of H1 2018, coworking spaces in India have grown massively in India, reaching a total area of just under 40 million square feet. This growth can be seen in 16 major Asia Pacific cities including Bengaluru, Mumbai, and Delhi NCR, says CBRE. These cities have also made their names as emerging coworking culture hubs in the country.
By June 2018, Delhi NCR, Mumbai, and Bengaluru had around 2.8, 2.9, and 4.1 million square feet flexible space available respectively. This data represents about 2.83 percent of the total real estate inventory available in those cities.
The market saw a double growth in the coworking sector in 2017, making it one of the most rapidly growing industries in India. The growth lasted in 2018 and is expected to continue in the coming years.
Large Enterprises Eyeing Flexible Workplaces
Startups have been adopting to coworking spaces as it serves in their advantage; however, in the coming years, large companies will also be tapping into this space. Amazon and Starbucks have already been leading this trend since it serves as a reason for corporates to go beyond cost savings. The companies are figuring out that working outside the traditional office environment, surrounded by like-minded, young, enthusiasts will help their company grow and meet new challenges.
Traditional Industries Switching to Coworking Options
Technology and eCommerce companies have been spearheading the growth of coworking culture in India. However, traditional sectors such as banking, insurance, manufacturing, etc. are more likely to fuel the growth of agile workspaces this year. Significant companies today want to portray themselves as modern companies with new-age thinking and culture to attract young customers. Proving flexible work options will prove to be advantageous in that regard.
Niche Coworking Spaces to Emerge
Coworking spaces these days offer the latest amenities such as fast WiFi, conference rooms, snack bars, game zones, and more. Nevertheless, these spaces are generic and cater to all kinds of people irrespective of their work or personality. As per SmartWorks, we would soon see coworking spaces for a particular industry in 2019.
These coworking offices will have dedicated space for specific types of people, such as health enthusiasts with healthy snacks, gyms, etc. Currently, about 41% of the users of coworking spaces are activity-based, which is expected to grow to 78% over the next two years, according to the CBRE report.
Tier ll Markets will See Major Growth
The coworking spaces in India have reached Tier ll cities in the past couple of years, and it is expected to grow in 2019. Currently, Delhi, Mumbai, and Bengaluru have the most significant number of coworking spaces in India, with cities like Chandigarh, Ahmedabad, Kochi, Indore, and Jaipur following the trend.
Office rent is expected to grow in India in the next coming years, and according to CBRE, the total area leased by coworking spaces in Tier l and Tier ll cities could reach 6-10 million square feet in 2020.
Consolidation of Players in the Sector
More than 350 players are looking to grab their fair share of the coworking space to sustain and lead the market. Consolidation is right around the corner, as more and more players are entering the sector. A few large operators are expected to rise and have an association with smaller-scale companies for better economic growth.
Automation and Expansion of Service Offering
While the majority of the coworking spaces host tech companies, they rely on the manual process themselves. In the coming years, coworking spaces are likely to become tech-savvy. This process will help in booking a seat or a conference room, generating an invoice, paying for services, tracking attendance. By automating all aspects of operations, office management will become seamless, devoid of human error.
Agile workspaces will also offer services beyond the current tradition.
Productivity and Collaboration Efforts will Increase
One of the aspects that are expected to see a rise in these spaces is productivity. Facilities such as yoga classes and creches will be incorporated to boost productivity.
Moreover, collaborative efforts will be boosted to help people work together in a cohesive workplace. Coworking places will host events, workshops, seminars, and meet and greets.
Multi-Location Spaces to Get More Growth
The companies prefer to rent a coworking space that offers the flexibility of being leveraged in multiple locations. Travelers are choosing membership options that can be used on the go, considering this, a lot of coworking spaces are planning to open in newer areas.
Quality of Coworking Spaces will Get Better
Coworking spaces are expected to improve the overall design and comfort of the office. Stuff like modern interiors, trendy furniture, standing desks, and big-screen TVs will be integrated into the coworking space.
Cleantech and Greener Spaces will be and Order of the Day
Coworking spaces are expected to integrate more elements of nature. This step will help the workers to relax and enhance their productivity.
One of the fundamental changes would be cleantech. Technology with more giant carbon footprints is expected to be moved to cleaner solutions. They are also likely to incorporate solar-power energy, copper ACs, etc. to make the space more efficient and sustainable.
Not so many years ago, coworking spaces was a completely new idea. Now, the industry has seen rapid growth, which is expected to continue in the coming years. The coworking spaces are expected to grow even more fascinating as soon as they introduce the above-mentioned trends.