Audhesh Pandey, Head – Commercial, Retail & Emerging Business, Property & Asset Management, India. – JLL expressed that Co-working has taken a big leap in terms of growth. “Pandemic was a pitfall for all the segments but this sector has picked up quite well and the growth we are seeing is phenomenal. Currently flex space segment is expected to grow at a CAGR of 25% plus in the next 3 years. Growth opportunities and challenges are there and innovation will take the industry ahead.”
Robin Chhabra, Founder & CEO, Dextrus added, “In the beginning there was a strong focus on the commercial real estate, now hybrid work model is here to stay. In pandemic there was cautious behaviour but in 2021 we saw companies come back with different requirements, restructuring, resizing, and having split locations and rotating staff. These requirements were easy to address for co-working and managed office space.”
Kushal Bhargava, Co-Founder, My Branch was of the view that the adoption of co-working has improved because of the hybrid work culture and the hub and spoke model. “Because of this there has been a substantial move to the tier-2, tier- 3 cities. The movement has been greater where infrastructure in terms of internet and other facilities are present.”
Manas Mehrotra, Founder and Chairman 315Work Avenue, Managing Director NestaVera Group stated, “It’s important for an organization to consider right strategies when taking up the space. Traditional commercial real estate and flex workspaces each have their own advantages. In another 2-3 years, the co-working segment will become 100 million sqft by 2028. It’s also important how do we look at growth in tier 2 & tier 3 cities.”
Sumit Lakhani, Deputy CEO, Awfis concurred, “Co-working sector is not winner takes it all market. Lot of players will co-exist in this segment. There is lot of space for local players to grow and co-exists.”
Aryoman Langrana, Senior General Manager, Transformation & Strategy, Coworks shared, “Managed offices are coming into play. To bring back employees, experience driven amenities are gaining importance. How do you encourage people to travel to work is a big value proposition for tenant. We advise companies to well structure their workspaces which includes co-working component for the company’s real-estate strategy.”
CONSOLIDATION AND GROWTH
As per Audhesh Pandey, while there is a consolidation happening in the sector there is also a lot of growth occurring reaching almost 40% in some cities. “More than 2000 co-working space exists in India which is almost 3% of the traditional office space.”
Sumit Lakhani said, “There are players who are focused on managed office category where you pick up a cohort of 300 plus seats. There are players who are focused on the b2c kind of model with less than 100 seats kind of customers. There are players who try to swim across all the segments and then there are space providers who are only into b2b segment. Likewise some are doing well in tier 2 and tier-3 markets that requires a very different kind of skill set and heavy lifting.”
Manas Mehrotra added, “For first 5-6 years any industry grows organically and then you start seeing strategic acquisitions. If you compare built versus acquisition you will never find value to the acquisition versus built. When you have reached a particular level and you know that in 2-3 years you have to go to an IPO to a larger investor pitch you have to go through the model of acquisition. You have to be much grounded in this business. “
Kushal Bhargava shared, “Most co-working players in the market are regional players. The traditional landlords moved toward co-workings, providing customised services to the client. They are very small players because of that for the biggies creating a product differentiation is very important. Within co-working a lot of customers are asking for customisation and added value services such as accounts and finance, hiring, compliance etc. So,there is enough opportunity for each and every co-working.”
Aryoman Langrana expressed, “Compliance is super important to big corporates. From a b2c view bulk of workspace is going to be gen-z who want experience as well as ESG and environmental amiability.”
Robin Chhabra concluded that innovation lies in not making cheaper office spaces for profits margins but providing smart and sustainable space and flexibility in use, for profitability over a period of time.
THE THREE IMPORTANT C’S IN CO-WORKING BUSINESS STRATEGY ARE – CLARITY ABOUT PRODUCT AND PRICING, POSITIONING AND BRAND VALUE OF PRODUCT. SECOND IS CONSISTENCY IN SERVICE TO THE CUSTOMER ACROSS EVERY CENTRE AND THIRDLY THE COMMUNITY WHERE PEOPLE CAN FEEL A SENSE OF BELONGINGNESS.
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