The adoption of Co-working has been quick in India owing to its unprecedented growth in the past 3 – 4 years with all conventional office users considering this as a viable alternative to owning/operating their own workspaces. The industry is estimated to reach a valuation of $2.2 billion by 2022 while the coworking penetration would increase from 0.7 percent in 2017 to 5.7 percent in 2022.
Once more a western concept, coworking is now widely accepted as a viable workspace option in India as well, by big corporates, SME’s and start-ups alike. Shared workspaces are rapidly attracting businesses amidst a booming demand in India. Best in class infrastructure, renewed networking opportunities, workplace flexibility, no fixed capital investment and the ever-swelling commercial real estate prices are some of the many factors that are driving this demand in the India market. Clearly, the shared workspace industry is anticipated to become a key part of commercial office leasing as the segment in India is expected to touch 10 million sq. ft. by 2020.
The most significant factors that are contributing to this growth momentum for the co-working segment include –
Cost Effective Model
One of the big drivers of the co-working segment is no upfront commitment of any fixed capital while leasing out the office space. For freelancers, start-ups and medium-sized- enterprises (SMEs), capital cost becomes a critical factor which provides a viable alternative in form of co-working spaces for their workspace requirements. The multiple factors of carrying additional capacity for future growth, superior infrastructure at lower cost, and rising CRE rentals make the strong case for a significant opportunity for the growth of the co-working segment. Co-working spaces also lead to cost savings in the range of 20–25% when compared to any traditional office in India’s top cities like Delhi NCR, Mumbai, Bangalore, Hyderabad and Pune. Hence, it comes as no surprise that start-ups and corporates alike are looking at co-working spaces as a more suitable alternative.
Networking & Collaboration Opportunities
Co-Working spaces by bringing people from diverse companies, backgrounds and cultures create a closed loop physical platform that allows people to engage and network. Co-working spaces provide its members with the opportunity to move outside of their companies and comfort zone to make professional connections, get multiple viewpoints, and a different perspective on challenges by looking at issues in a completely different light. Shared workspaces and networking are almost synonymous and a key feature driving various companies and professionals to adapt to this new age way of working. A flexible and collaborative work environment with the focus on activity-based settings, networking events and employee enrichment activities are seen as crucial for many companies, who want to provide their employees with the right tools and flexibility to unleash their creative potential. Co-working spaces often become the melting pot of cultures, where freelancers and start-ups engage with large corporations, SMEs and vice versa; inadvertently exchanging learnings, rubbing off important business characteristics like agility, flexibility and often finding business opportunities and creating commerce and learning within the ecosystem.
Workspaces with Extensive Amenities
The new mantra for the developing agile and effective workspaces is the ability to bring an integration between work and life for its users. Companies today are set up with age-old practices of hierarchy, opaqueness and limited engagement traits which have no resonance with today’s millennials. Companies are making the shift to co-working to ensure that they can provide all the amenities and facilities that they otherwise are unable to offer to their employees in a traditional office set up. Most coworking spaces today offer an extensive array of amenities and workplace benefits that are attractive for the employees and surpass traditional offices. Apart from the basic workplace amenities like activity-based settings, co-worker engagement zones, recreational areas, the spaces are embedded with the latest technology-enabled infrastructure that not only enhances employee productivity but also helps manage it effectively. Engagement with brands that get access to the diverse set of users enables them to offer exclusive discounts on a range of products & services which are specially curated experiences make workspace an integrated platform enabling life beyond just work.
Millennials Driving the Trend
India is the youngest start-up nation in the world where 72% of founders are less than 35 years of age. It is widely projected that by 2020, millennials will form 50% of the global workforce. Co-working allows the right exposure and opportunities to network and engage for skills enhancement and work enrichment without any organizational rigidness and hierarchical boundaries. This attracts the millennial workforce who have a more open and collaborative style of working. This builds a compelling case for many corporates to consider working out of shared workspaces more extensively in the future.
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