Shared working spaces, coworking spaces, flexible workplaces are some of the common terminologies that we hear today. The market is skyrocketing in India as we speak, and our country is the second largest in this business over Asia-Pacific.
Managing Partner of Orios Venture Partners, Mr. Anup Jain states that coworking spaces make life much easier and startups can flourish greatly owing to this. Orios also works from a coworking space named WeWork that is spread across at multiple locations in Mumbai and Bengaluru. Anup is also of the opinion that the kind of bonding and co-ordination you get from these spaces is second to none.
The trend of coworking spaces was initially very limited, only startup firms and small-scale companies preferred to use them. But things have changed now, and we have witnessed large conglomerates, and offshore companies making use of these spaces for their operations.
Cities like Chandigarh, Ahmedabad, Kochi, Indore, and Jaipur are also included among the list of metropolitans that these spaces have covered. As per the statistics conducted, there are over 179 spaces in Tier II and Tier III cities. The total revenue generated by this sector in 2019 is close to $96 million. The trend is setting in and for the better of it.
Eliminating money-spending operations
Smartworks Founder Neetish Sarda is of the opinion that the advantage provided by the coworking spaces is to let go of the excessive operational obstacles that are faced by companies. They want all this to be done without depreciating their usual standards, and that is exactly these spaces offer to them. Plus, the focus is on making the service offerings consistent, and the client problems are resolved quickly.
A real estate expert from Bengaluru puts forth his opinion that the operational costs are a cause of concern. Coworking spaces offer you everything, and the creation of one is very intensive in terms of operations that one could imagine. Reason being that all of these operations like events, sessions, meetings, collaboration, all of it needs to happen at minimum cost, ensuring that is a tough job indeed.
But another factor which bundles up with these spaces is companies maintaining the optimum possession level for the better part of the year and expand further to grow. But only a few companies can do that kind of thing.
As per an official survey conducted by JLL, although there is a significant rise in the demand of coworking spaces, only 40% of them are deemed to be remunerative. So the journey to expand further would be longer than usual.
Profitable and Working Models
Business models for a coworking space are not smooth sailing, as per Sunanda Verma Bhatia, the Co-Founder of Daftar, Pune. The cashflow which is generated out of this business is essentially good, but the owners also need to put in money for developing and thereby improving the spaces. Which is why the business can be termed as cash-intensive. But there are risks and rewards with any kind of business model that is a part of the industry these days, as Sunanda states.
Popular co-working spaces Awfis provides services to their clients based on a Managed Aggregation Model or MAM. This business model provides Awfis with the authority to partner with the space owners whose office spaces might not be utilized properly. A deal is accordingly struck, wherein the owner would be investing in the space given by Awfis themselves.
Sudeep Singh, CEO, GoWork believes that the coworking culture is not just about giving spaces to the clients for their operations. It is about ensuring that the spirit of coworking exists in its faithful spirit.
There are various pricing methods and options in place for the coworking spaces. Usually, the price margin per seat in the space can be anywhere between 10,000 INR to 45,000 INR. This ensures that small scale enterprises and startup companies can make do with this.
Multiple such spaces like Oyo Rooms have initiated their coworking venture called Oyo Workspaces. They are operating in over 10 cities with the capacity of over 15,000 seats, and they have many prestigious clients at their disposal as of today.
GoWork and Awfis are also hosting respected companies like Paytm Mall, TVF, CS Direkt, Coverfox, Syngenta, Dun & Bradstreet, Duff & Phelps, and so many others.
What is the future?
Awfis would be expanding their base by 2022 by reaching a mind-boggling margin of over 2,00,000 seats. Currently, they have the total capacity of 30,000 seats at 63 centers spanning over 9 cities in the country. Even GoWork would be expanding their plans for the metro cities in the coming five years.
It is a well-known fact that India is the youngest nation in terms of growth and technology, but it is also the youngest startup country wherein the founders are mostly millennials. This is why coworking spaces need to make things a bit more enticing and put in all the latest technologies. In essence, it is true that coworking spaces are essentially the driving force of Modern India.
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