Co Working Space
The new sharing economy is changing the way business has traditionally been done. The commercial real estate industry is no exception. Flipkart and Uber have disrupted the e-commerce and taxi service industry respectively. Airbnb is upsetting the hospitality industry. The trend of co working space is revolutionizing commercial real estate.
Co working space is changing the face of the traditional office.
Co working space is the wave of the future. In fact, some say it has already become a fixture in the commercial real estate market. The numbers are impressive.
As per CBRE report, Co Working Space leasing in India will touch 10 Million sq.ft by 2020.
While demand more than tripled in 2016 to touch 0.7 mn. sq. ft. as compared to 2014, this year (2017), leasing is expected to cross 1.5 mn. sq. ft.
Shared office spaces fall into 3 categories. Traditional business centers, co working spaces and incubators/accelerators.
There are close to 350 shared office operators present in India, across 800 locations.
85% of shared office space in India is in Tier 1 cities, while the remaining 15% is in Tier 2 cities. With Bengaluru, NCR (Delhi, Gurgaon and Noida) and Mumbai being gateway cities. 75% of the shared office spaces are based in these three locations. Each has more than 100 shared office spaces followed by Hyderabad, Chennai and Pune.
More than 90% of business centers and co working spaces are present in tier 1 cities. Almost half of incubators/accelerators are present in tier 2 locations.
The most significant benefit of a co working space is the cost saving compared to a conventional space leasing. Cost saving is anywhere between 10% – 25% when choosing a co working space.
The co working culture
Co working spaces provide a place to socialize, meet interesting professionals and expand networks. These spaces give a sense of community to professionals who are otherwise isolated at home or in coffee shops.
They offer the convenience of short-term commitment, rentals on a daily or even hourly basis. Moreover, these spaces are hip, with modern décor and luxuries. Ranging from gourmet coffee and organic snacks to pool tables, arcades, and sleek break spaces.
The collaborative economy is coming to real estate sooner than expected. There will be a higher demand for dynamically configurable spaces.
Commercial real estate developers should consider shared office space needs. Developers should note that competition is growing for shared work spaces. Perks like gyms, gourmet coffee access and lounge space will distinguish their spaces in this growing market.
Research shows that the shared office space trend is creating more efficiency with respect to utilization rates of office space. This in turn may create an increased impact on building infrastructure. For example, more demand for parking spaces and increased rates of elevator usage.
Entering into the shared office market may lead to an increase in deals down the road. As these small businesses outgrow shared space, they can move upstairs to a dedicated office space of their own.
Initially co-working spaces were focused on providing solutions for entrepreneurs and startups. However, with many benefits the concept is now catching up with established corporates.
The total space leased by co-working operators in tier 1 and tier 2 cities is could touch 6 – 10 mn. sq. ft. by 2020. With the choices of India’s millennial population continuing to have an impact on India’s real estate industry, co-working could be the differentiator in attracting talent.
Vaneet Infra provides an opportunity for entrepreneurs and startups. Under the project, City Court, you can have your own office or start a co working space. We offer 21% assured returns. The project is located on National Highway will all modern facilities.
Call 96461-90099 for more details or visit here.