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COVID-19: Social distancing derails India's shared workspace market

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Apart from occupancy levels and footfalls declining, the shared workspace market may not be able to sustain if a lockdown due to COVID-19 continues.

COVID-19: Social distancing derails India's shared workspace market
The last couple of weeks -- since the number of coronavirus infections started rising in India -- have seen added emphasis being laid on social distancing, which some suggest should be adopted as a lifestyle to combat COVID-19. As a result, a number of companies have asked staff to work from home. This has, not surprisingly, impacted India’s fledgling co-working space.
Occupancy rates and footfalls at these premises has taken a drastic hit, both of which have seen a decline according to co-working space companies. “There is an impact of about 10 percent currently, in the whole set-up since people are restricting themselves from coming into work,” said Gurbinder Rattha, Founder and Managing Director at Chennai-based co-working space firm, Workafella.
Not all shared workspace companies are reporting a marginal decline. “Approximately, 32 percent of our members are choosing to work from home. However, we are taking all precautions to ensure that all workers opting to work at our offices, are safeguarded and follow appropriate safety procedures,” said Ashish Goenka, Director at Redbrick Offices.
It’s the same story at larger companies. WeWork has conceded that there has been a drop in footfall — the company did not divulge by how much — but said that business hasn’t been gravely affected, yet. “Since a lot of member companies have given their employees the option of working from home, we have experienced a drop in footfall at our spaces,” said a WeWork spokesperson.
Apart of occupancy levels and footfalls declining, the bigger worry is that the shared workspace market may not be able to sustain itself in the medium-term should the COVID-19 outbreak and the emphasis on social distancing continue. An indication of this is that business enquiries have also suffered at most shared workspace companies, according to aggregator, Flexispaces.com.
“We are observing a 40 percent drop in the footfalls of new inquiries,” said Sandeep Prasad, Founder, Flexispaces.com, “If the situation remains the same or even gets worse, co-working may be one of the most affected industries due to this, and the drop may go up to 70 percent.”
However, shared workspace brand CoWrks said that while smaller companies are logging out of shared workspaces, larger enterprises are seeking smaller cubicles to ensure synergized business continuity.
Heightened precaution continues to prevail. When CNBC-TV18 requested CoWrks to visit one of its shared workspaces in Chennai to get a visual perspective of how COVID-19 had impacted occupancy levels at these offices, we were told of a strict no-visitors-allowed policy being implemented for the time-being. This was understandable given that social distancing is crucial at the moment.
“While we’ve opened up our spaces for people — to make it an extended work-from-home or a temporary workspace, what we’ve done as an added precaution is we have completely cancelled all events and community space utilization,” said Abhishek Goenka, CEO, CoWrks.
This means that almost all shared workspace majors are taking mandated precautions — like temperature-screening of members, frequent swabbing with disinfectant, a blanket ban on visitors, and instituting every measure the government has laid down.
“We are keeping a check on this (government regulations), and making sure that we are there to protect our customers and our teams in this environment,” said Harsh Lambah, Country Manager (India), IWG, “If the government introduces new regulations, we will be adapting to that,” he added.
Luckily for co-working space companies, the Indian government has stopped short of imposing an outright ban on shared work environments, but has issued several advisories on working from home, with Prime Minister Narendra Modi calling companies to let employees work from home whenever necessary. Nonetheless, it’s a matter of time that we’ll know how this cultural shift will impact companies in the business of letting out work stations.
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