Building Flexibly for Working Flexibility
Real Estate

Building Flexibly for Working Flexibility

With about 200 co-working operators running an estimated 400+ facilities across India, and flexible workspaces expected to rise to about 10 million sq ft by 2020, business is booming.The idea of a workplace has significantly evolved over time in terms of space util...

With about 200 co-working operators running an estimated 400+ facilities across India, and flexible workspaces expected to rise to about 10 million sq ft by 2020, business is booming.The idea of a workplace has significantly evolved over time in terms of space utilisation, equipment placement and automation. Particularly over the past decade, there has been a special focus on office design to enhance employee productivity, as seen in our roundtables and featured in our stories over the past year. As the smart office projects featured in our column ‘Special Project-Green’ demonstrate, offices have begun to focus increasingly on natural light, indoor air quality, greenery, lighting and HVAC, among others. Current market 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.”Design and build trends Co-working spaces have started to put a lot of thought into design to suit the requirements of tenants. The industry is seeing an increase in the ‘design, build and operate’ model, where companies can focus on their core product or service and outsource the responsibility of designing, building and managing office infrastructure to workspace solution providers. Co-working providers can then use their expertise in international design and technology to greatly enhance user experience and make workspaces fun, enjoyable and productive.Finding the right aesthetic and creating the right balance of creativity and functionality lie at the heart of co-working design. “Exposed ceilings, engineered wood flooring, customised lights, walls with a raw concrete finish, modern furniture, lots of glass, and the creative use of natural light and indoor greens are ideas finding favour with co-working designers and architects today,” says Lambah. The design sensibility of Spaces, for example, is deeply inspired by its Nordic heritage. “Our design is recognisable, consistent and inspirational, while being customised to each Spaces location around the world,” he adds. “In addition to avant-garde styling, each Spaces centre is infused with a sense of calm and quiet that encourages creative thinking and calm workflow.”Design trends in co-working spaces are focussed on creating collaborative, flexible and personalised spaces, with a blend of design and aesthetics that meet every user’s visual and psychological acceptance. “We have designed minimalistic yet vibrant spaces exhibiting the energy of the millennial workforce by offering workspaces with collaboration zones, meeting lounges, activity-based settings and phone booths,” says Amit Ramani, CEO & Founder, Awfis. “The inclusion of artificial intelligence (AI) will be significant in coming years, aiding new-age, technology-enabled smart workspaces.”As CoWrks’ spaces are designed to cater to all working styles, says Menda, “Members can choose from ergonomic desks, private all-glass enclosures, comfortable lounge seating, uniquely designed meeting rooms and prime event space. Our spaces also include fuel bars, complete with gourmet coffee and bar-style seating that encourage conversation. Our spaces are infused with natural light and our aesthetic is engaging and modern, with bold and inspirational artwork on the walls.” Across co-working offices, some elements remain constant: Break-out spaces, lounge areas, a well-serviced pantry, gaming zones and varied reading material. “A key selling point for co-working spaces is the presence of a fluid, interactive design that encourages collaboration and productivity,” says Neetish Sarda, Founder, Smartworks. “Spaces designed to the needs of our clients while providing flexibility are a big draw. At the same time, a work environment that enhances creativity, innovation and collaboration are at the core of most designs. Open cubicles, natural light, funky innovative furniture, etc, tend to be common aspects.”Most co-working spaces offer a number of features such as private offices, flexible workstations (hot desking), ready access to meeting rooms, and even virtual office services. As Shray Rattha, Co-Founder & Director, Workafella, tells us, “Each of our centres is aesthetically designed with soothing interiors, lighting conducive to a good working environment, custom-designed chairs to ensure lumbar support and easy access to all plug points to maximise comfort.”Cost-effective planning technologiesA traditional office takes anywhere between eight and 12 months to be operational. However, co-working providers are committed to build a workspace in an average of three months.Co-working offices are highly time-sensitive projects owing to high rentals costs and occupancy demands. If one goes by conventional design and build methods, site handover and costs invariably end up escalating owing to delays and inefficiencies. As many stakeholders are involved, these projects are also prone to communication lapses and reworks.Tornado, a vertically integrated technology-driven B2B general contractor start-up, attempts to solve these problems with a three-pronged strategy, as Satya Vyas, Co-Founder and CEO, explains: “First, deployment of proprietary operational tech, which helps customers track all packages of a particular project – very similar to tracking an order on an e-commerce website. This gives end-to-end visibility to all stakeholders involved. Second, project communication tool – a native chat application that brings all stakeholders on a common page for collaboration, so multiple instructions and changes in drawings, etc, are captured in a single repository. And third, use of BIM. In large co-working spaces, we have done test implementations and BIM has helped us save fit-out costs, time and reworks for customers. We build coordinated and intelligent 3D virtual models on BIM to help design, construct and manage buildings in an easier way, which is time-efficient too. It gives you a realistic idea of the space in the planning and development phase, which is instrumental in making optimal use of what’s available.”Tools such as AI, Internet of Things (IoT), machine learning and social networking can improve and optimise space utilisation and networking. With CoWrks already integrating AI and predictive data, Menda says, “We have built ecosystems such as CoWrks Connect, an app designed to transition physical connections that members make into the digital realm.” Machine learning algorithms make it easier to accurately predict specific events that members might be interested in, and thereby target advertising within their large member base accordingly. “We are in the process of developing artificially intelligent chatbots to assist members with simple tasks such as planning meet-ups with other members,” he adds. “An AI-powered personal assistant gives an employee more time to focus on more productive work. If employees need to report an issue or ask a question, they can simply post their query to a chatbot, who will forward queries to a real human office manager (a community manager), only if a machine response does not suffice.”For IWG, its network is designed to help customers control costs while improving productivity. “Our co-working centres use enterprise standard and ‘always-on’ IT infrastructure and security protocols,” adds Lambah. “With 24 x 7 customer service and a dedicated account manager supporting every contract, our customers can focus on what really matters to their business.” Getting the RoI right Awfis specifically targets underutilised commercial assets located at strategic locations and turns them into Grade-A workspaces. As Ramani shares, “Our primary business strategy revolves around transforming latent real-estate assets into co-working properties, which garners higher revenues for the developer, while we are able to attain real estate at a lower cost. This is a win-win situation for all parties concerned and fundamentally ensures that we meet our revenue targets.”CoWrks has determined four major factors to ensure and analyse RoI, according to Menda: “Meeting our desired occupancy target at the right time, with the right revenue per member; looking at reducing capital costs of the centre by standardisation and economies of scale; using smart systems to reduce operational costs by keeping up with the high level of service level agreements; and ensuring retention of members by providing them an incomparable experience in terms of events, amenities and offerings.”Investment plans of large co-working playersIndia’s five major co-working players – Regus, WeWork, CoWrks, Awfis, Smartworks – plan to add another 7 million sq ft by 2020, as per Knight Frank.“At IWG, we are taking Spaces to cities such as Noida in Delhi-NCR and are also expanding in Hyderabad, Pune and Kolkata. We seek to increase the number of workspaces in India to 250 within 36 months. Our focus will be on expanding Spaces to Tier-II cities. We also plan to launch our franchise plan in India this year,” says Lambah. CoWrks, too, is looking to expand into cities such as Pune, Ahmedabad, Chandigarh, Indore and Jaipur. “We plan to start operations in Europe and Southeast Asia soon,” reveals Menda.Awfis is also planning to enter Tier-II markets such as Jaipur, Kochi, Indore and Bhubaneshwar in the next 12 months, while continuing to strengthen its base in Tier-I cities. “We aim to double our capacity year-on-year to reach 2 lakh seats by 2021,” says Ramani. “To cater to a diverse set of clientele, we have launched Awfis Enterprise Solutions (AES) and are providing exclusive and fully customised offices for companies across the country.”Smartworks’ goal is to expand its footprint to over 20 million sq ft in India and Asia (particularly ASEAN and South Asian countries) by 2022. “In India alone, we are looking to increase our footprint to 10 million sq ft in the next three to four years,” says Sarda. The firm plans to add a number of facilities in key metros and is also exploring Tier-II cities. “We are working to expand our operations in Hyderabad to cater to existing and potential clients.”By the end of 2019, Workafella plans to have 15,000 seats to offer, growing at 3x in size for the year. “Further, we aim to reach 25,000 seats by 2020, and hit the 100,000 seat milestone by 2023,” avers Rattha. “With an established footprint in Chennai and Hyderabad, and functional co-working centres in Bengaluru and Mumbai, we are constantly on the lookout to acquire more spaces, especially in the latter two cities. That said, we are also on the lookout for opportunities in Delhi-NCR and Pune. We would like to venture into Tier-II cities such as Vizag, Kochi, Ahmedabad, Coimbatore and Chandigarh.”Brigade Group’s BuzzWorks will launch over 2,500 seats across seven locations and three cities in coming months. “Our locations will include Bengaluru, Kochi and GIFT city, to begin with,” says Nirupa Shankar, Executive Director, Brigade Enterprises. “We plan to expand operations in other cities with time. We are currently allocating `1 billion for this venture.”Way forwardWith 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 $2.2 billion by 2022, which sets the tone for a shift in the entire commercial real-estate sector in India. Having said that, challenges co-working operators can encounter, in Sarda’s view, 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 Lambah. 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!Large Players, Large SpacesIn India, Regus’s network spans 16 cities and 120 locations, offering a combination of private offices and co-working options. It currently has about 0.2 million sq m (2 million sq ft) and 20,000 seats under operation, as per a Knight Frank report.CoWrks currently operates 2 million sq ft of office space across cities, with 25 centres in Bengaluru, Mumbai, Delhi-NCR, Chennai and Hyderabad.Awfis currently has 30,000 seats across 63 centres in 10 cities, including Mumbai, Bengaluru, Delhi-NCR, Kolkata, Pune, Hyderabad and Chandigarh. Smartworks has a total footprint of over 2 million sq ft across 22 centres in nine cities across the country. It is present in Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata and Pune, with multiple facilities in each city. Last December, it launched one of its biggest facilities – 3 lakh sq ft – in Bengaluru (the third in the city).Currently, Workafella has 9,000 fully functional operational seats and 6,000 seats in the fitout stage across four cities: Chennai, Hyderabad, Bengaluru and Mumbai. It recently launched ‘Hi-Street’, a statuesque 1.5 lakh sq ft,12-storied building, in Chennai.Brigade’s BuzzWorks has currently launched 200 seats in Whitefield and North Bengaluru, and has multiple centres under fitouts.Developers starting to co-workOf late, several developers are starting their own co-working offices or collaborating with co-working operators. “This is because developers can offer such spaces to existing corporate clients who have temporary space requirements or are planning to scale down or up without investing in fitouts,” says Dr Samantak Das, Chief Economist and Head of Research & REIS, JLL India. When asked what is prompting developers to start their own co-working offices, Nirupa Shankar, Executive Director, Brigade Enterprises, responds: “We see co-working as a natural extension of our business. There is a lot of demand from existing tenants. Today, companies want to outsource the administrative pains of managing multiple premises and create flexibility and efficiency in their real-estate costs. Considering that Brigade already has a sizeable office portfolio, a catering company called Celebrations, a facility management company called Orion Property Management services, and a hospitality management company, it was much easier for us to create co-working services. Our brand is called BuzzWorks, which derives its inspiration from the bee, nature’s finest example of a collaborative species that works well as a team.”The Standout USPAs a large co-working group with multiple, easily accessible centres within and between cities, Workafella offers disaster management services at no extra cost. “In the case of any unforeseen natural calamity, our members have ready access to any of our spaces, ensuring their work is not interrupted,” says Shray Rattha, Co-Founder & Director, Workafella. “Perhaps our standout USP, one that has proven tremendously useful for clients, is our ancillary business services support. Our team of well-established charted accountants provides end-to-end finance services, ranging from registration and compliance to tax returns, acting as an on-demand virtual CFO. Similarly, our HR suite comprehensively supports major department functions such as recruitment, employee training, and upskilling.”

Next Story
Infrastructure Urban

Uttarakhand CM inaugurates 66 feet national flag in Dehradun

Uttarakhand Chief Minister Pushkar Singh Dhami inaugurated a 66 feet high national flag in Dehradun as part of the Smart City project. The initiative is one of many under the Smart City project, which focuses on enhancing Dehradun's infrastructure, beautification, and civic amenities. The flag aims to foster patriotism and pride, becoming a local landmark. Dhami highlighted the importance of such symbols in promoting unity, while the project continues to enhance Dehradun tourism.Andhra Govt allocates Rs.167 bn for Panchayat RajThe Andhra Pradesh Government allocated `167 billion (bn) for the P..

Next Story
Infrastructure Transport

NHAI Set to Launch Green Bonds Valued at Rs 10 billion

Reiterating its commitment to promote environment sustainability and development of green highways, National Highways Authority of India’s fully owned Special Purpose Vehicle (SPV) ‘DME Development (DMEDL) will issue green bonds to raise funds for the implementation of environment friendly measures on Delhi-Mumbai Expressway project. To be held under closed bidding system, the aggregate total size of the issue will be up to Rs10 billion with a base issue size of Rs 5 billion. There will be a green-shoe option to retain oversubscription up to Rs 5 billion. The first of its kind green bond i..

Next Story
Infrastructure Transport

Govt may Offer 35% Subsidy for Goods Transport via Inland Waterways

To enhance the transportation of goods through rivers, which currently constitutes only 2 per cent of India’s total freight movement, the government is planning to introduce a three-year subsidy scheme for cargo owners opting for inland waterways. Under the proposed initiative, a 35 per cent subsidy for transportation on national waterways 1, 2, and 16 is expected to shift around 800 million tonne-kilometres (tkm) of cargo to inland waterways, as per the Ministry of Ports, Shipping, and Waterways. (Tkm measures cargo transportation by multiplying the metric tonnes of goods by the distance ..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000