Reeling under pressure due to sharp drop in footfalls following the COVID-19 pandemic, operators in the country's coworking industry believe the blip could be temporary and demand for flexible space would go up again as some key factors are going for them.
But challenges remain for the sector, which has posted remarkable growth in recent years and seen by many as a catalyst of sorts for modern office spaces, as large corporates are still wary of depending on them for their expansion, citing restrictions and limitations.
With many employees working from home amid indications that a significant section of them would continue to do so even after the coronavirus-induced situation returns to normalcy, coworking space providers would now have to rethink their strategy, particularly in the workplace, interior and design areas, and make the segment more attractive for consumers.
While concerns around Covid-19 have also led to reduced footfalls in co-work spaces which have been growing at a rapid pace for the last few years, this blip could be temporary and last till precautions are deemed necessary, said Manas Mehrotra, Chairman of coworking company 315 Work Avenue.
According to him, any businesses would now seize the opportunity to rethink their working arrangements to provide more flexibility to their employees than ever before, especially considering the benefits of productivity and engagement, and, this will push up the demand for coworking spaces.
Once the lockdown period ends, companies would also lay more emphasis on cost optimisation and prefer flexible workspaces. Most corporates would avoid capital expenditures and look to coworking facilities to expand their business, Mehrotra said. Ashutosh Limaye, Director & Head - Consulting, ANAROCK Property Consultants, said coworking is likely to see subdued demand over the next few quarters, but will also see the fastest revival.
Once the pandemic pressures will eventually ease-out, several businesses would look to restart in these flexible workspaces, he added. Coworking spaces are not only the most cost-effective, but also offer flexibility in terms of the time period of rental agreements. Coworking spaces can be rented on a monthly, day-to-day and even hourly basis, Limaye noted.
According to Anuj Puri, Chairman ANAROCK Property Consultants, on an average, coworking spaces offer a substantial price difference of 15 per cent over traditional spaces in the top cities.
While Pune offers the maximum cost advantage of 33 per cent, Gurugram in the National Capital Region has the least at six per cent, he said. While start-ups and budding entrepreneurs make a beeline to coworking spaces, large corporates remain wary of depending on them for their expansion.
This trend is quite contrary to what is witnessed in developed European nations, Puri, however, added. Despite all the indubitable upsides of coworking spaces largely patronised by enterprises, freelancers, small and medium businesses and startups, they do have limitations and restrictions, it was noted.
Apart from most of them lacking separate canteens or pantries for occupiers, they also bar corporates from organising events in common areas. One of the industry players said maintenance of these properties is another challenge.
While some large companies do use coworking spaces, these limitations have generally put some others off the notion of embracing them despite the lower rents.
Former Chief Financial Officer of IT major, Infosys Ltd, T V Mohandas Pai told PTI: Co-working facilities have to maintain social distancing, so they will take a hit because density is very high, so I think there will be a problem.
A leading operator in the coworking space said social distancing would now mandate the density in the open work stations. While the desk sizes have reduced, occupants would now need to sit six feet apart.
Newer air-conditioning systems need to be installed to take care of air quality and prevent airborne viruses and cross-contamination between offices within a coworking setup, this player said.
Mehrotra said the coworking industry might also see some consolidation soon and companies will explore acquisition opportunities, adding, the current situation will also see larger enterprises seeking smaller spaces to ensure synergised business continuity in the near future.
The COVID-19 is certainly not an end to the coworking culture as people would discover that the benefits of social gatherings in terms of emotional and intellectual fulfilment would be a crucial necessity for the overall health of a society, he said.
People need options and access to a collaborative environment are needed for success in life and work, he added.