Co-working spaces are growing even as start-ups increasing fail in India

Co-working spaces
are growing even as start-ups increasing fail in India

In 2016, the information technology (IT) industry represented around 58% of the total office demand in India and 41.6 million sq ft of office space was leased in top nine cities.

With millennials representing the largest generation in the workforce and an unprecedented focus on new workplace designs, work styles, and work culture; these factors have led to the growth of flexible and specialized workspaces. The coworking industry is mainly dominated by startups followed by media, e-commerce companies and a few corporates and multi-national companies (MNC's).

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Currently, coworking operators have a small footprint in India, but they are slowly carving out a significant space in the real estate industry. Although factors such as flexibility, networking opportunity, and cost-effectiveness will continue to drive demand for coworking spaces, the need for swing spaces, transitional workspaces and office solutions in multiple locations will further fuel the demand for coworking spaces.

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Although major coworking operators leased only 1.2 million sq ft in 2016, which accounted for 3% of the overall leasing volume, Colliers forecasts that the plan is to lease 8 to 9 million sq ft by 2020.

The concentration of coworking spaces is expected to intensify further in Bengaluru, Mumbai, and Gurugram (Gurgaon) due to the availability of adequate infrastructure and opportunities for start-ups in those cities.

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Hyderabad may also pick up the pace as companies such as Apple, Google, and Amazon, have recently taken large office spaces in the city which will create further opportunities for start-ups and a few SMEs. Among Tier II locations, cities that have a high presence of technology companies such as Pune, Jaipur, Chandigarh, Ahmedabad and Kochi should also witness the emergence of coworking hubs.

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Coworking spaces are improving collaboration and stress-free working environment which helps develop an efficient and a “happy”, workforce. Not just the international operators, now the domestic players, are taking the concept to the next level as well.