India has emerged as the second largest market for co-working in the APAC region, after China. Reports indicate that co-working was the fastest growing sector in commercial real estate last year and will continue to grow exponentially this year as well.
In 2018, flexible office space crossed 6 million sq ft, according to CBRE—over 50 per cent higher than the previous year. This was also the year several players entered the country and set up operations. And in the first three months of 2019 alone, flexible working spaces have leased nearly 3 million sq ft commercial realty, a 70 per cent increase on a quarterly basis.
Today, there are close to 200 co-working operators running an estimated 400+ facilities across the country. Notably, the five major co-working players in India—Regus, WeWork, CoWrks, Awfis, Smartworks—have 0.79 million sq m (8.5 million sq ft) operational space, as per Knight Frank. Private equity players have also been looking to invest in co-working startups. One prominent example is that of Sequoia Capital, which invested $ 20 million in mid-2017 in Awfis.
Cities on the high
Bengaluru, Mumbai and Delhi house the biggest concentration of co-working spaces in the country, with about 70 per cent of India’s start-ups. Data suggests Bengaluru was at the top, garnering maximum activity. However, in Q12019, a visible shift occurred with Hyderabad emerging as the leading city for co-working space taken up.
“From the second half of 2018 onwards, we began seeing demand for flexible workspaces go up in Tier-II cities,” says Harsh Lambah, Country Manager-India, IWG Plc. Adds Sidharth Menda, Founder & Vice Chairman, CoWrks, “Multinational companies, SMEs and start-ups are increasingly setting up their base in cities like Hyderabad and Chennai.”