Covid-19 threatens to kill co-working — but the owners believe it will only get cheaper and better
Awfis official Facebook
- Co-working spaces in India believe that the impact from coronavirus is short term for them.
- Experts believe that the values of co-working – flexibility, cheaper costs – will kick in soon and the industry will see a decent upsurge when things stabilise.
- Some co-working spaces have already begun to see the slow rise in demand coming through.
The coronavirus lockdown has seen India's busiest streets sport a ghost town look while 1.3 billion people stayed home. India's booming IT industry and the startup ecosystem had made the tough decision to begin work from home even before the lockdown was put in place.
And this has proven costly for India's co-working spaces. Tenants are not only raising their voice and want rent waivers for the time they worked from home, but also their return seems unlikely because of the coronavirus scare.
Many co-working spaces are working with their landlords and tenants to figure out an agreeable solution. “There are three elements with which we work – fixed rental, fixed operating cost and a variable operations cost. So, we are working with our current members as well as landlords to bridge the gap and offer some concessions,” said Amit Ramani, founder of Awfis.
Here’s how prices differ from co-working spaces and conventional offices spaces across top Indian cities
|Mumbai: Grade A office spaces in CBD (central business district) areas like South Mumbai and Bandra Kurla Complex||₹18,000–27,000/desk/month||₹24,500–30,000/desk/month|
|Mumbai: Grade A office spaces in SBD (secondary business district) areas like Lower Parel, Andheri Kurla Road||₹12,000–18,000/desk/month||₹15,000–18,000/desk/month|
|Delhi: Grade A office spaces in CBD areas like Connaught Place||₹13,000–19,000/desk/month||₹20,000–25,000/desk/month|
|Delhi: Grade A office spaces in SBD areas like South-East Delhi and Delhi International airport, East Delhi and North Delhi||₹5,000–10,000/desk/month||₹10,000–20,000/desk/month|
|Bengaluru: Grade A office spaces in CBD areas like M.G. Road, Millers Road, Vittal Mallya Road and Residency Road||₹7,000–15,000/desk/month||₹10,000–18,000/desk/month|
|Bengaluru: Grade A office spaces in SBD areas like Koramangala, Bannerghatta, Hosur road, Electronic City||₹3,600–8000/desk/month||₹6,500–15,000/desk/month|
The tide will turn
However, co-working owners think the situation is going to turn into their favour soon.
Ramani said that obviously, in the next three-six months all co-working spaces are going to grapple with the situation. “But what we see in the mid term, when hopefully the curve has flattened, coworking spaces actually have a good opportunity. This is because of the flexibility we offer,” said Ramani.
Advertisement“We don’t give a 6-year lock in for our tenants, they are free to choose their lock in. We convert a capital investment into an operating cost – you are basically paying a service fee. Then comes the network we offer – you don’t have an office in one location, you can be spread across five locations,” he added.
Experts too believe that these factors will boost their growth, again. “Coworking is likely to see subdued demand over the next few quarters, but will also see the fastest revival - the pandemic pressures will eventually ease out many businesses will look to restart in these flexible workspaces,” said Ashutosh Limaye, Director & Head - Consulting, ANAROCK Property Consultants.
AdvertisementSome co-working spaces have already begun to see the slow rise in demand coming through. GoFloaters, which provides an on-demand office network, told Business Insider that it has already been receiving a lot of queries from companies who want to be leaner or want to follow a hybrid-remote model of work post lockdown. “Our on-demand office spaces would help businesses reduce their spend on office spaces anywhere between 20% to 80% on an average.
As we are into hyperlocal and neighbourhood space models, we have also invested time increasing our spread in each of our cities. This would help professionals and businesses find spaces closer to home yet work remotely,” said Shyam Sundar Nagarajan, co-founder CEO of GoFloaters.
Another win for co-working will also come from the fact that companies will have to practice social distancing within their campuses, which means they might have to station some employees in different locations.
AdvertisementThe future of work is flexible
With lockdown 3.0, offices allowed to keep a minimum occupancy rate, ABL Workspaces has already opened doors. The co-working company is undertaking deep cleaning and sanitization of its workplace regularly.
“To regain optimal cash flow, even larger business enterprises with their owned places will be looking for more affordable workplaces, which is where co-working spaces will come in. So, we are confident that with the benefits that we as a co-working player have to offer, we will be able to bounce in no time,” said Akshita Gupta, Co-Founder and CMO of ABL Workspaces.
AdvertisementDue to Covid19, the global economy is also in recession which also means companies will be cutting corners. We have already seen this happening in India with job cuts across industries. In the post covid era, companies are going to continue to be extra careful and that’s also when they could turn to co-working.
“As a space platform, GoFloaters is helping companies of all sizes reduce the burden of fixed real estate costs either by giving them on-demand workspaces or by letting out their excess capacity. Going by the trend and current global phenomenon the future of work is going to revolve around the flexibility to work remotely, no commute culture and on-demand services,” said Nagarajan.
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