With co-working demand continuing to grow across cities, flexible workspaces in India are expected to rise to about 10 million sq ft, with as many as 13 million people expected to work out of co-working centres by 2020.
Tier-II cities alone are estimated to grow to 8.5 million seats by 2020. Of the 13 million, 10.3 million seats are expected to be used by enterprises, 1.5 million seats by SMEs and 100,000 seats by start-ups. According to CBRE, many corporates are also expected to allocate 10 per cent of their office portfolio to agile workspaces. Further, the industry is expected to reach a valuation of $2.2billion by 2022, which sets the tone for a shift in the entire commercial real-estate sector in India.
Having said that, globally, maintaining occupancy levels is the most challenging task for a co-working operator and the Indian market will be no exception. Other challenges co-working operators can encounter, in the view of Neetish Sarda, Founder, Smartworks, include the cost of development and operations, too many players in the market leading to saturation, and waning demand.
And so, a consolidation among co-working operators seems likely. “What is interesting, however, is the huge economic value the sector portends for the future,” says Harsh Lambah, Country Manager-India, IWG Plc. A recent IWG report predicts that India will see the greatest gross value add (GVA) increase from flexible workspaces, potentially an increase of 141 per cent, which equates to $375.8 billion, by 2030. The future, as they say, is bright!