The biggest testimony to the business model comes from the fact that India’s new age tech billionaires are seeing this as the next big thing
Nyra Damani, 24, a freelance photographer, chooses to work independently, on her own terms. Life is often a struggle when projects are tough to find and clients don’t pay up on time but she wouldn’t trade her professional freedom to become a corporate slave despite the enticing comforts of a fixed monthly income.
Vivek Dogra, 35, a video editor, is a risk averse individual who on the other hand, loved his fixed monthly income from a news network, so he could organise his finances, pay his home loan EMIs, invest in his mutual fund SIPs and enjoy an international vacation every year. That was until he recently lost his job owing to restructuring within the company that had employed him for the last 7 years. As a result, he was tossed into the tumultuous freelancing world much against his will.
Fate brought Damani and Dogra together. Or rather, a co-working space in Gurugram did. No, this is not their love story but the results of this serendipity are no less interesting. Adjacent chairs in a co-working space allowed them to get in touch with each other, have creative conversations over many cups of coffee, collaborate professional skills and eventually co-create content through their very own partnership firm. Yes, spaces can create businesses – such is the power of this new age real estate concept called ‘co-working spaces’.
Gig economy, youth and hassle-free operations
The gig economy is the new reality not just in the West but in India as well. The concept and nature of ‘work’ are rapidly changing with a young, tech-savvy, mobile workforce that no longer wants to stick to a straight-line career. India’s ‘multi-potentialites’ are well on their way to having multiple careers in a single lifetime and making this possible is the gig economy that helps workers get employed for time bound or task bound ‘gigs’.
One of the many facets of the gig economy is the rising demand for co-working spaces – an idea whose time has come in India. Many youngsters are choosing to have non-linear careers as freelancers, entrepreneurs or remote workers for large corporations, creating a demand for swanky, digitally enabled, new age offices that are affordable. Paying a monthly rent of Rs 8,000-15,000 per seat for a fully functional modern office in a prime location makes far more business sense for a struggling entrepreneur than buying/renting real estate and setting up the entire infrastructure from scratch.
India is the world’s youngest startup nation with more than 70 percent founders under the age of 35 years and for the country’s Gen X, Y or Z or whatever we are calling the youth of today – workspaces need to enhance creativity, contribute to collaboration and networking, be flexible, adopt latest technologies and yet be affordable. No wonder then that co-working spaces saw new entrants and increasing competition throughout 2018 and as the trend continues to grow, these companies are doing everything they can to attract more and more occupants.
Zen philosophy for mental health
Noida-based Eccosphere – a co-working space startup harnesses the ancient Zen philosophy to offer an environment that helps its users achieve a mind, body and work balance. The company claims its Zen Buddhist design radiates calmness and serenity and fuels productivity.
Eccosphere’s facilities, like those of many other co-working spaces, include unique common areas, onsite staff, superfast internet (it’s the only co-working space in Noida to offer 1 Gbps bandwidth), printers, lockers, cleaning and HR services, private phone booths and more.
But the company has set its USP as being a space that cares for your mental health and allows you to keep stress at bay. Its infrastructure includes a Zen garden, a library, a room for power naps, a yoga and meditation zone, a cross fit gym for fitness enthusiasts, a gaming zone along with an indoor park and an outdoor café that provides free refreshments. A round-the-clock facility, Eccosphere has built its entire IT infrastructure on Cisco Meraki and offers virtual office options that are a huge hit with millennials.
Even large corporations are now finding it more economical to lease ready to use, plug-and-play office spaces for the long term rather than invest in buying, developing and maintaining real estate for years to come. Companies like Amazon, Microsoft, Arcelor Mittal, Tata Communications, OLX, Jaguar Land Rover and hundreds of others have booked lakhs of seats for their respective workforces at co-working startups like WeWork, Smartworks, Awfis, Regus, CoWrks, 91Springboard and a whole host of others.
Catering to luxury clients
The premium or luxury co-working space is another area that is seeing growing demand. Avanta, founded in London in 2004, entered the Indian market a decade ago foreseeing a market opportunity in the flexi offices segment. “When we entered the premium co-working space, we were told the market is limited but now we have full occupancy in these offices. This is why we are expanding further,” says Nakul Mathur, MD of Avanta India whose client list boasts of Rolls Royce India, Confederation of British Industry, Thomson Reuters, EY and others.
Avanta India’s five co-working spaces in Delhi are located at prime realty spots like Nehru Place, Connaught Place, Saket, Aerocity and on NH 8 in Gurugram – areas that are the target spaces for luxury brands across sectors. “As office rentals are rising across business districts in India, co-working operators will be looking at meeting a requirement of around 9 million sq ft. in one year’s time. The main focus even for MNC clients remains the same as that for startups – saving operational cost, time in setting up and achieving flexibility as against traditional offices,” says Mathur.
Technology as the big bait
India’s largest co-working space provider, Awfis has made ‘technology’ the front, back and centre of its offerings. It is collaborating with What3Words to provide its clients a seamless way to locate each of its 63 centres across 10 cities in India. What3Words divides the entire world into 3m X 3m squares, transforming the entire geographical dynamics with a highly sophisticated and unique algorithm that guides consumers to their destination with a level of precision that traditional means cannot offer – with a simplified 3 word address.
On the B2B side, Awfis is leveraging technology to target mid and large sized corporates with its recently launched Awfis Enterprise Solutions (AES). The gamut of services offered by AES includes workspace design and build, project management, IT services, workspace management, concierge services and specially curated experiences. AES also allows easy access and connectivity to a huge community of over 19,000 professionals and 1500 companies that uses its centres pan-India. “Having garnered tremendous success in the co-working landscape, we continue to identify operational gaps and varied business opportunities in order to provide our customers with enhanced services amidst continued efforts to provide a superior office space experience,” said Awfis CMO Sumit Lakhani at the time of the AES launch.
An investment for the future
According to a JLL report, most institutionalised co-working operators have been seeing near 100 percent occupancy levels with a break-even period of just 5 months, suggesting that co-working spaces may even overtake the traditional serviced office by the end of 2020. Mumbai, Bengaluru and Delhi/NCR currently top the preference list of co-working companies but large scale operators are even eyeing tier 1 and tier 2 cities in the long run as new age technologies make remote working a norm and startups look to solve hyperlocal problems in small towns.
The growth potential of the concept is further affirmed by a CBRE report that announces a 277 percent jump in leasing flexible workspaces in just the first quarter of calendar year 2019. But perhaps the biggest testimony to the business model comes from the fact that India’s new age tech billionaires are seeing this as the next big thing. Hospitality unicorn Oyo recently acquired Gurugram based co-working startup Innov8 in reportedly the sector’s biggest deal for Rs 220 crore, with a vision to create 10,000 seats across India and Oyo is now creating 3 different co-working brands simultaneously to crack different price segments.
As paradigm shifts in mentality accept collaboration as the new normal in every sphere of life and emerging technologies like the internet of things and artificial intelligence connect humans to devices for more efficient processes and better outcomes in a simplified manner, the future of work is definitely ‘shared’. If you are a part of the current or future Indian workforce, strap on your seat belts and sit tight in your win-win position as co-working spaces enter heated competition and woo you with mind boggling possibilities!
Mridu Bhandari is Editor – Special Projects at Network 18. One of India’s youngest Ramnath Goenka Awardees in 2007 for her work on rural development, today Mridu dabbles in many subjects ranging from entrepreneurship, education and emerging technologies to healthcare, brand stories and personal finance. On most weekends, she can be found anchoring special programmes on Network 18 news channels.
First Published: IST