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Co-Working Spaces Gain Momentum In Delhi-NCR; May Become Major CRE Disruptor

Co-Working Spaces Gain Momentum In Delhi-NCR; May Become Major CRE Disruptor

Co-Working Spaces Gain Momentum In Delhi-NCR; May Become Major CRE Disruptor
(www.coworkingspacesindia.com)

With a thriving start-up ecosystem aided by the Modi Government's efforts to create an enabling environment for entrepreneurs across the country, demand for co-working spaces has seen a rise in recent times. Among the main drivers of this phenomenon are the increasing number of freelance professionals and consultants in today's globalised workforce for whom co-working spaces are now all the rage across Indian metros. Also, co-working business centres are in great demand with corporates looking for flexibility in work locations.

Delhi-NCR (National Capital Region) is definitely among the more prominent regions witnessing this global trend. In 2016, the number of co-working spaces in Delhi-NCR was more than 30; this year, it is expected to go over 40. There are currently more than 2,500 seats available across different micro-markets in the NCR. The average occupancy share of co-working office spaces across the NCR is about 70-75 per cent, but, will go up once the recent seat additions in most micro-markets are leased out. Of all micro-markets, CBD (Central Business District) Delhi has the lowest vacancy in this segment at 8-10 per cent. All other micro-markets have vacancy levels in a range from 20-35 per cent.

The number of co-working seats is expected to range between:

  • 200 and 250 in Delhi CBD (central business district)
  • 450-500 in Delhi SBD (secondary business district)
  • 250-300 in Gurgaon CBD
  • 500-550 in Gurgaon SBD, and
  • 400-450 in Noida's CBD and SBD together.

The cost per seat per month is in the range of:

  • Rs 10,000-15,000 in CBD Delhi
  • Rs 8,000-15,000 in SBD Delhi
  • Rs 13,000-15,000 in CBD Gurgaon
  • Rs 7,500-12,000 in SBD Gurgaon, and
  • Rs 7000-10,000 in both CBD and SBD-Noida

What makes co-working tick? 

Co-working spaces are rapidly popping up across Indian metros and tier-II cities. Through these, start-ups get flexible working options at affordable rents. These spaces offer desks at cheaper rentals in an office-like environment. Business nomads, expats or those travelling to the country for a few months also prefer such options instead of working out of coffee shops. For co-working operators, small and medium enterprises, along with start-ups, are the biggest target clientele.

The number of players specialising in co-working office spaces across India is expected to surpass 100 sooner rather than later. Some of the major co-working spaces in Delhi NCR are run by firms like 91 Springboard, Awfis, Investopad, Innov8 and Alt F, among others. The biggest benefit these spaces offer to their clients is a cohesive and synergised environment along with business networking opportunities. Moreover, co-working players organise many corporate events for their clients to socialise formally.

Apart from freelancers and consultants, some corporates offer flexible working options to their staff by leasing a few desks in some of these establishments. To reduce their financial burden and simultaneously motivate and retain talent, more corporates could turn towards co-working spaces in the future. Some companies also decide to base their project teams out of co-working places to let them remain close to their clients.

Developers, too, are now starting their own co-working offices to provide incubation spaces, or divide large floor plates for smaller occupants. There is currently very limited supply of co-working spaces - but once this situation improves, the demand for them will skyrocket. As bigger co-working players enter India and more such facilities crop up across cities, this category can prove to be a major disruptor on India's commercial real estate market.

Last Updated: Sat Mar 11 2017

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