How does co-working become a lifestyle choice for sustainability?

In line with the global boom, the Indian co-working segment is also growing at an increasing pace, becoming one of the fastest-moving segments in commercial real estate in India. At the end of 2019, just before the pandemic, the Indian co-working and flexible office segment had about 471,000 seats across 30 million square feet, according to research by JLL, a leading global real estate advisor.

Meanwhile during the pandemic, despite initial hiccups and set-backs, the department played an important role in the recovery of the real estate market, providing much-needed relief and flexibility to occupiers. By mid-June 2022, the total number of seats in the co-working and shared office segment has reached 680,000. It is estimated that by 2025, the number of seats will cross 1 million.

India today is one of the major co-working markets in the world like other major economies like UK, USA, Hong Kong, Russia, Canada, etc.

A flexible and durable choice

In the past, shared workstations were mainly preferred by start-ups, freelancers and other small business enterprises. However, the occupier profile is now opting for shared space with an increasing number of MNCs, large IT companies, BFSI enterprises, family offices etc.

Co-working offers a flexible and sustainable alternative to occupier demands. Occupiers don’t have to spend huge amounts to lease office space in the CBD and then spend more to get it ready for day-to-day operations. Instead, they can lease seats as per their needs at nearby co-working spaces and pay based on total usage. This protects tenants from incurring unnecessarily high costs, optimizes their real estate spend and allows them to focus more on their core business activities.

The co-working and shared office trend is also compatible with flexible and remote work, which is becoming increasingly popular in the wake of the pandemic. A large portion of the workforce in many organizations is still working remotely, which also means that instead of leasing regular Grade-A or B-type office premises, the occupier can opt for a relatively small flexible workspace and use it accordingly. In the future, if they need to upscale (or downscale) as needed, it can be done hassle-free.

Leases in co-working offices are also very flexible and mostly between 9-12 months. Meanwhile, leases in regular office set-ups can go up to 5-9 years.

Many big corporates are now leasing centers in smaller cities like Lucknow, Indore, Coimbatore, Vizag etc. It is estimated that around 40% of workers at large technology and IT companies are still working remotely, and this includes the growing concentration of WFH workers in such small towns.

To cater to such a workforce, large corporates are now opening new shared office centers in Tier 2 and 3 cities. It helps the workforce to take a break from constantly working from home and work from a more professional workstation.

Recently Amazon and Accenture opened centers in Indore and Coimbatore. A large portion of the demand for co-working spaces in the future will originate from small towns and cities.

Improved personal productivity and networking opportunities

As large corporates and business owners gravitate towards the shared office segment, this is ultimately helping the sector to enrich and improve its offerings. In the past, most shared office premises mostly included a cafe, meeting room and hangout corner. Meanwhile, as client profiles are changing, fellow players are also stepping up their game and adding new layers of services like numerous games and fitness facilities, entertainment zones, networking and collaboration spaces, etc. As a result, it now helps employees relax better, take timely breaks and optimize their overall productivity.

Another important benefit of a co-working space is that it fosters meaningful interaction between employees. Interestingly, in a shared space one gets many opportunities to network and interact with employees, partners and leadership from other companies and industry verticals. This helps in their holistic and holistic growth and development, which is much needed in the present market scenario.



The views expressed above are the author’s own.

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