- While the co-working spaces had to stop operations during the initial phase of the lockdown, things are now slowly getting back to normal.
- In fact, the lockdown could have given a boost to the industry as more and more organizations are now looking at cost-efficiency, flexibility and people are increasingly looking for spaces near their houses.
- Most players from the industry are confident that the co-working space will see resurgence soon, and that it has a good growth opportunity in the future.
Often bustling with people from varied background, all working at the same place, co-working spaces had a lot of pros. Apart from the cost-efficiencies and the increased flexibility for people working at their own pace and time, these spaces were also great places to network and build connections.
However, with the lockdown, the functioning of these spaces was brought to a halt, atleast in the initial months, when people were stuck at homes. However, with things opening up, there has been a visible change in how people work.
We decided to find out what exactly is happening in the co-working space and what its future of looks like from where we stand today.
How the co-working space fared in 2020
It is obvious that the co-working space would be hit by the lockdown. However, the same lockdown gave rise to an evolution in the way we work. People suddenly were looking for flexibility. Places like Mumbai where a huge population depends on local trains were left stranded once the trains were stopped, so it also led to a rising need for office spaces near people’s homes.
Meanwhile, the pandemic also led to a lot of the players to re-invent and innovate, to address consumer problems.
Two months into the pandemic, Awfis launched its work-from-home product - Awfis@Home. It provided employees the flexibility to work efficiently from their homes while replicating the setting of a productive office work environment, including the Physical infrastructure, IT infrastructure and Tech integration. “We have received a great response for the product, for instance, 1000 units of Awfis@Home have been sold till now via direct sales as companies are providing allowances to employees for a comfortable work from home experience. We also created win-win partnership models like ‘Powered By Awfis’, which continue to help companies optimize costs by creating flex workspaces out of their unutilized or underutilized real estate. This in turn generates an additional revenue source for them and while allowing us to add to our existing footprint,” shared Ramani.
Meanwhile, some even looked at diversification to keep their businesses going. “We successfully launched our dream workstreams, namely Founders Club – a business accelerator to help early stage startups and The Circle of Angels, an angel network to facilitate funding for startups,” shared Bathla.
The present scenario
Despite the minor disruption that the lockdown caused, most co-working spaces are seeing a good resurgence and most players are optimistic about the industry getting back on track.
“Co-working spaces are doing well and witnessing robust operations now. The post lockdown scenario is bringing in a wave of new opportunities for the co-working players. While the work-from-home model would have worked well in the lockdown, many companies may not want it as a culture and many business verticals and functions still require employees to work in an office setting. Work-from-home may co-exist, but office space will not lose its importance. Many companies, even pre-pandemic, have had to deal with the burden of long-term, lock-in leases with heavy security deposits, which take away the ‘business cashflow’ ability to respond to changes in the economy quickly. Now, more than ever, flexibility is crucial and hence co-working spaces, with their natural flexibility and inherent readiness to add value are best positioned to adapt and redefine the future of work and workspace,” explained
A recent report by JLL stated that the current market penetration of flexible workspaces in total office space stands at 3% and this percentage is expected to go up to 4.2% by 2023. The report further stated that irrespective of some short-term disruptions and challenges, increased demand from large enterprises will help the industry grow to more than 50 million square feet by 2023. The flexible spaces segment is expected to grow by an average of around 15-20% per annum over the next three-to-four years, even though the trajectory might not be linear.
Bringing people back to co-working spaces
Despite things opening up, there are many people who have their reservations about venturing out, atleast till the vaccinations hit the markets. Considering going to a co-working space means often working beside or making contact with people you might not know, how convinced are people to come back? And how are these spaces wooing people back?
Apart from providing its members with multiple flexible options to suit their needs, WeWork is offering additional flexible options to help businesses ease into their new routines and get back to the office.
“To ensure our space abides by the health and safety regulations, we conduct frequent cleaning of our areas, sanitization of equipment, in a bid to prioritize team wellbeing. Every WeWork facility has revised spatial guidelines, seating layouts, and social distancing norms. WeWork is ready with all health and safety measures as members return, keeping government and industry body guidelines in place. We are also the only shared workspace in the country to have received the global certification from The British Safety Council. The certification recognizes our efforts in taking stringent risk management and control measures to keep the environment safe and secure for all members and stakeholders, Singh shared.
Shining the spotlight on what Awfis is doing to ensure safety, Ramani said “An operational checklist is in place to ensure the physical safety and wellbeing of our occupants along with maintaining the highest standards of hygiene. We are constantly and transparently communicating with our clients to address any concerns and also helping with formulating a return to workplace strategy to gradually transition back to the physical workspace after months of work from home.” Awfis will also be soon launching new features like the UV sanitization of meeting rooms and thermal scanning before entering the meeting rooms.
Meanwhile, 315Work Avenue is also not leaving any stone unturned to make sure people feel comfortable in their spaces. “We have put in the best practices in place by consulting a vast panel of experts on our board which also includes several doctors. Based on their inputs, we have come up with two very differentiating products to provide hospital/ healthcare facility standard sanitization at our workspaces. First is making use of an ‘Ioniser,’ a patented technology that provides hospital standard air filtration and kills all the germs in the air. Second is making use of coatings and paints which always keeps the surfaces sanitized.We have also redesigned our seating arrangement at workstations and in areas like the cafeteria, lift, breakout lounges, etc. to maintain proper distancing,” Mehrotra shared.
“Adopting to the highest standards of safety as prescribed by Ministry of Health and other government bodies, ensuring very visible sanitization and daily disinfection of premises, institutionalizing our own differentiated standards of contactless technology like temperature screens as members walk through the turnstiles, QR code-driven vending machines including tea and coffee machines are some of the initiatives we’ve taken to heighten safety, explained Bathla.
What the future holds
So what will the future look like for the flexi, co-working space? And how are these players future-proofing their business to ensure their businesses are not impacted adversely even if another year like 2020 comes about?
“Our endeavor here was to future proof our team’s mindset. Team Circle persevered with a positive spirit, keeping the evolving future in mind and collectively worked to showcase how to navigate through tough times. Keeping relationships vs economics at the forefront, we retained more than 80% of our member base. The rebound is going to be superfast when you have customer and clients on your side,” shared Bathla.
Meanwhile, Mehrotra feels that co-working space providers now need to rethink their strategy, packages, interior and design areas, and make the segment more attractive for consumers. “Co-working spaces will see a surge as they offer flexible infrastructure solutions and also set precedents for safe and healthy practices too. As companies look to resume business, redesigning and restructuring of existing real estate will pose yet another challenge, however co-working spaces will be able to respond to design changes required post-COVID-19 quicker and more efficiently than traditional office spaces,” he said.
Earlier this year WeWork India received $100 million in a fresh round of funding and the organization already has a plan in place focusing on long-term sustainable growth across all its spaces. “We want to pivot our energies towards attaining profitability for sustainable long-term growth. While the first three months of 2020 were profitable for WeWork India, as we moved towards the pandemic phase, there were some changes we made at a strategic level that focus on existing locations, while we continue to enhance member-experience through flexible solutions. We continue to offer flexible solutions to businesses of all sizes this year and focus on attaining profitability by early 2021,” added Singh.