Co-working Spaces: A New Trend in the Indian Market
A joint report by JLL and Confederation of Indian Industry said that net absorption in commercial segment is expected to exceed 39 mn sq ft by 2020. There has been a huge demand for co-working spaces in the recent times and few reports highlights that absorption by service providers is tripled to 3.44 mn sq ft in the period January-September 2018. In the year 2017, the co-working space was 1.1 mn sq ft. The co-working sector has doubled to 10%. According to the report vacancy declined to 13.7% in the period July- September 2018. The office sector will gradually come down in the mid term (2018-2020). Companies in the industrial segment in the cities like Bengaluru, Delhi-NCR, Chennai have been showing keen interest in office spaces. Mumbai and Pune are no far behind. But interest has been shown more for the co-working spaces. The share of co-working sector went up from 4% to 10% from last year. According to Ramesh Nair, CEO and Country Head, JLL India, the preference for co-working spaces will rise substantially in the coming years, especially in the cities Bengaluru, Mumbai due to availability of infrastructure and a startup culture. Tier II and tier III markets will also catch up soon.
The report states that large demands for co-working comes from big corporates(40-45%), then comes small-medium enterprises(35-40%), the last being start-ups(15-25%). The co-working spaces helps in cost reduction by 25% in cities like Delhi-NCR, Bengaluru, Mumbai and Pune. According to Sandeep Sethi, MD, Integrated Facilities Management- West Asia, JLL India, the commercial real estate will have to buckle up to match the technology disruptions affecting the way companies are conducting their businesses globally. FinTech startups have promoted low cost office spaces with modern technology infrastructure. E-commerce players are also considering co-working spaces now for cost savings. The new standard of holistic Wellness for office buildings is gaining momentum. The concept aims to address the wellness of employees at workplace.