Large Corporates Take to Co-working Spaces

It helps counter high rentals, paucity of grade A offices
Large information technology , banking, financial services and insurance companies are increasingly opting for co-working spaces to cope with rising rentals and shortage of ready-to-move grade A offices in prime property markets across the country .While the likes of Boeing, Visteon, BNP Paribas, Kimberley Clark, and Redcore (Accenture’s sister company) have moved some of their operations to co-working spaces, many more are planning to follow suit now.

Currently , there are 61 co-working spaces in India, of which 16 were set up in 2016, according to data tracking firm Tracxn. In Mumbai, Lower Parel and Andheri are the hotspots for co-working spaces, and witnessing good demand from corporates. In Bangalore Sarjapur Outer Ring Road and Old Madras road are seeing such hubs.

Sidharth Menda, CEO, Cowrks, said, “By opting for a co-working space, an outfit with 50 people, can save up to 30% in costs. Businesses small and big have begun making the switch to co-working facility not only because of effective pricing and flexibility , but also because they realise it is a much better way of working.”

According to international property consultancy firm CBRE, global average utilisation of assigned seats is 60% (excluding vacant seats).Global average of meeting room utilisation is just 30%.

Given the huge potential in India, global co-working giants such as WeWork and Spaces are expected to enter Mumbai soon. Numerous other international players are also showing keen interests in setting up co-working office facilities in the country, said industry observers.

Co-working spaces are a big draw with startups. They offer flexible working options at affordable prices. While some allow rent-free period to tenants, apart from utilities and an office look-and-feel to potential startups, there are those that serve as incubation centres, said global real estate consultant JLL.

Ram Chandnani, managing director ­ advisory & transaction services at CBRE South Asia, attributes this trend to lower leasing and financial risk. “Co-working spaces lower overhead costs by limiting the amount of separate, dedicated space a business needs to lease. Many large corporates are moving to co-working space even as they build their new campuses,” he added.

Awfis Space Solution, a co-wokring companies jointly owned by Amit Ramani and banker Rana Kapoor’s entrepreneur daughter Radha Kapoor is going a step ahead by converting under-utilised spaces into work stations. For example, Awfis converted its industrial mill in Lower Parel into a premium co-working space. At Powai, it converted under-utilised space at a shopping centre into the most sought after co-working spot.

“Large corporates account for 25% of our current occupancy . We are looking at non-conventional building that can be converted into co-working space,” said Amit Ramani, founder and CEO Awfis Space Solution.

Source – The Economic Times (Delhi)



Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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