Co-working spaces and other flexible workplace options are globally a booming business. In India too, the story is no different. The demand for such spaces among corporates is increasing with each passing year with the ridiculously high rentals in big cities in India.Awfis, a new-age venture, is one of the firms that is looking to cash in on this growing opportunity. The Delhi-based company provides ready-to-use,
plug-and-play office spaces accompanied by tech solutions for flexible space utilisation.
Founded in April 2015, the company is planning to launch a public issue in 2022, its founder and CEO Amit Ramani said.
In an interview with CNBC TV18, Ramani weighs in on the growing trends of co-working spaces among corporates, the opportunity and trends in the segment.
Edited excerpts: Give us some insights on the growth of co-working industry in India?
The coworking industry has witnessed phenomenal growth and success over the past few years in India and is slated to become the mainstream choice in the Indian commercial real estate sector. Shared workspaces have completely transformed the sector and over 13 million people are expected to work out of coworking centers by 2020 in India with many corporates expected to allocate 10 percent of their office portfolio to agile workspaces. With the industry expected to reach a valuation of $2.2 billion by 2022, it sets a strong tone for transformation within the sector. In addition to this, tier II cities are expected to grow to 8.5 million seats by 2020 and thereby coming to the forefront with respect to shared workspaces.
Which sectors are the major markets for coworking industry? In which sectors do you see most of the opportunity for co-working industry?
The company caters to a diverse set of clients with SMEs and corporates forming 40 percent each of the revenue share and 20 percent of the total revenue coming from startups and freelancers. We are servicing over 1500 companies and 19,000+ professionals across sectors such as IT Services, Media, E-commerce, BFSI, Technology, Consumer Products etc. Some of our clients include brands such as Dun & Bradstreet, Duff & Phelps, Vodafone, Hinduja Group and Michelin Tyres, among others. We expect this trend to continue wherein we witness more and more of SMEs and corporates to foray into the coworking segment, due to the easy access and affordability of Grade A commercial infrastructure.
What changes are the coworking industry is expected to go through in 2019?
2019 has been witnessing coworking spaces transform into a conventional choice, owing to the role of fast-moving technology in addition to millennials and Gen Z forming majority of Indian workforce. Shared workspaces are entering into untapped markets and owing to strong entrepreneurial aspirations are now driving demand across tier II cities as well. This will further pave way for Awfis to expand into tier II cities at the same rate of growth as in metros. We have already launched a center in Chandigarh and further plan to expand to cities such as Jaipur, Bhubaneshwar, Kochi, Indore etc. Interestingly, even larger enterprises are now opting for coworking spaces owing to flexibility and hassle free setting up of office spaces in Tier II markets.
In addition to the above trend, we are also witnessing coworking spaces becoming the preferred partners for medium and large sized corporates and MNCs to set up their head offices or satellite offices.
Can you explain why corporates are preferring coworking spaces these days?
We are witnessing a growth in the number of corporates taking up seats in coworking spaces and are expecting large enterprises adopting a strategy of maintaining traditional workspaces along with taking up space at coworking spaces. Corporates have now adopted flexible workspace as core part of their real estate strategy. Additionally, we are witnessing huge demand from several SMEs and corporates for setting up their headquarters/regional offices.
In such scenarios, our company manages the Workspace Design and Build, Project Management, IT Services, Productivity/Efficiency Management, Workspace Management, Café Management, Concierge Services and provide especially curated experiences to corporates.
What are your working models? How do you cater the needs of the office space buyers?
On demand side, Awfis offers an array of seats which cater to 1 hour of meeting room requirement to a 1000-seater long-term requirement of a larger enterprise. The products that we offer include: Coworking products like fixed seats, flexi seats, private cabins; Mobility Solution products like Virtual Office, National Pass, Awfis Roaming and Bulk Meeting Room Hours; and Enterprise level integrated solutions that come under Awfis Enterprise Solutions (AES).
What are the current and future trends in the coworking segment?
Shared workspaces will enjoy momentous growth in the coming years with “flexibility” being an important component amongst the other aspects of a workplace. Coworking spaces have proved to be beneficial for both organizations as well as employees. Large corporates are slated to allocate 10 percent of their office portfolio to agile workspaces owing to the holistic experience provided by coworking spaces. Shared workspaces will rapidly foray into tier II cities, in addition to metros witnessing great demand. Cognizant of the ever-growing AI and MI, the significant inclusion of these across coworking spaces will lead in the coming years and deeply support new workforce entering.
What are your growth plans? Are you planning further to expand in Tier II cities?
The company aims to double the capacity year on year i.e. it expects to reach 2,00,000 seats over next 3 years. Currently profitable at an entity level we hope to go public by 2022. We have launched a centre in Chandigarh last year and are looking at expanding into cities such as Jaipur, Kochi, Indore and Bhubaneshwar in the next 12 months, while simultaneously strengthening our position in tier I cities.
To cater to a diverse set of clients, the company is also adding services such as Awfis Enterprise Services (AES) i.e. a hassle-free way for an enterprise to outsource the designing, building and managing of their ‘own’ office space thus allowing them to solely focus on running their business.To strengthen the SME ecosystem in India, we have recently associated with GlobalLinker’s network of 2,50,000 SMEs to enjoy exclusive discounts and offers on Awfis’ 30,000 seats and 250 meeting rooms across India.