A key factor in India’s stunning office market has been the boom in co-working, post-pandemic. In the last six months, it has also been the sector leading the commercial market’s blockbuster comeback.
According to Knight Frank data, nearly 17 percent of the 25.3 million square feet of office-space real estate that were leased out to occupiers between January and June, belongs to co-working space operators. That totals to a whopping 47,500 seats in this period, which in turn translates to a 49 percent growth, year-on-year. Given that this segment occupied only 10 percent of all transactions a year ago, it’s also the fastest-growing one in the last six months.
It must come as little surprise then that individual co-working space operators have reported skyrocketing business, in this period.
"At the end of 2021, we were at about 65 percent occupancy and having one centre fully functioning,” said Pratik Sud, founder and CEO, Synq.Work, “Between then and now, we have six centres at almost 100 percent occupancy."
Business has been good that several co-working space brands have begun expanding operations. “We have grown almost four times our size. We were at 25,000 odd seats pre-COVID, now we’re touching almost 90,000 seats across 15 cities and 150 centres,” says Amit Ramani, co-founder and CEO, Awfis, "So we are excited about the present and the future."
Experts say that a key contributor to the success of co-working is just how well the segment has performed in tier-2 markets. Knight Frank says the segment has grown better than the market in Ahmedabad and Pune, occupying between 20 and 31 percent of the total volume of office space transactions this year.
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Bigger markets like Bengaluru continue to hold their own, registering transactions of 1.3 million square feet in this space. While these findings point to a massive opportunity for office-space developers to foray into co-working, these companies say they prefer leasing space to selling seats.
"They (developers) will shy away from that for the simple reason that our business is to build great infrastructure, great buildings and lease them out directly to clients rather than through a third-party," said Juggy Marwaha, CEO, Prestige Office Ventures.
That hasn’t stopped developers like Brigade, RMZ and Prestige from partnering with co-working space operators like Awfis, WeWork, and CoWrks to make the most of an industry on the rise.