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Coronavirus impact | Co-working space providers may reap benefits of social distancing norms

Under a hub-and-spoke model, companies may decide to have a main office, have a few employees continue to work from home and have others in multiple office spaces near home in a flex.

The COVID-19 pandemic, the subsequent lockdown and now social distancing norms are all set to change the definition of a 'workspace'. Most corporates going forward are likely to evaluate their density plans and seating arrangements in a conventional office.

Many of them are actually considering splitting their office into two or more locations to minimize future risk and also reduce dependency on one office, so much so that many are currently in talks with co-workspace providers for taking up space in multiple smaller offices across the city.

The day is not far when the main corporate offices may become a strategic space, some people will continue to work from home and some may be asked to work near home in a flex, said co-working space providers.

The idea is to have one of the locations in the same city up and running so that businesses are not impacted even if one zone is quarantined or is declared a hotspot.

"In the last one-and-a-half months enquiries have actually spiked by 60 percent. Corporates have informed us that they do not want to spend a significant amount of capital to open new offices, they want more flexibility," Neetish Sarda, founder, Smartworks, told Moneycontrol.


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It is too early to predict if these enquiries will be converted to deals or how long will it take for these enquiries to get converted.  It typically takes 45 days on an average. “But we are confident of a healthy pipeline of clients for our existing centres and for our new centres coming up in August to September,” he says.

The emphasis over the last few months has been on consolidation.

"Clients have asked us for offices across multiple locations in a city, especially in Pune, Delhi-NCR and Bengaluru. They are looking for business continuity just in case there is a hotspot in one of the locations. Companies have also realised that people would not want to travel that much. Therefore, the emphasis would be on co-working facilities closer to where people live," he said.

Some clients have also gone back to their co-working space providers with request for a dedicated workspace as opposed to open work plans as social distancing norms get precedent going forward.

"We are in the process of de-densifying our current offices. We will have to come up with a plan wherein clients get more private spaces and their employees are comfortable sitting with people they know and there are precautions being taken. We are working with our design team to figure out how we can make sure that our design incorporates social distancing automatically," said Sarda.

With this in mind Smartworks is planning to introduce design changes not only in its new centres but also the existing ones.

"We are assuming that most of our tenants are going to come back and ask us de-densify office spaces. We are therefore doing it not only for our new centres but also for our old centres. This may have a slight impact on our commercials as the number of seats go down and the cost per seat goes up, but we have healthy margins to sustain that,” he added.

According to a report by Colliers International India, multi-national companies (MNCs) are likely to re-evaluate their workplace strategies with respect to global in-house centres/support centres and call centres in India to minimise continuity risk.

Currently, Indian workplaces occupy typically about 60-80 sq ft per seat. Going forward, companies may adopt a hub-and-spoke model where occupiers can have one main office, and multiple smaller offices across the city.

Cash flows of small and medium enterprises may be hampered as they overcome a prolonged period of low productivity. Cost containment could emerge as a key factor in expansion plans of occupiers and they may be forced to scout for cost-effective solutions, which could include flexible workspace which involves lesser upfront capital and low capital expenses.

"We believe that flexible workspace operators who invest in making the workplace safer should see greater enquiries from occupiers," the report said.

Another co-working space provider Awfis is developing plans to ensure that social distancing norms are being followed.

"We are in discussions with our clients how they want to follow the process. Some have suggested that they employees work in shifts," said Amit Ramani, founder and CEO, Awfis.

Does this mean that the open plan in a co-working space may simply go out of circulation post-lockdown?

“If social distancing becomes the norm, we may have to redesign spaces but if open plans were to go out of action, it would be redesigning 90 percent of workspaces across the world and that may not be possible. There has to be a due procedure that may have to be followed,” he said, adding that going forward more corporates may take up spaces in co-working offices to not only cut down on costs but also to prepare themselves for diversified infrastructure.

There would be a focus on comprehensive workspace – work from office, work from home and work from a flexibile space near home. Multiple options may get curated along the way, he said.

Going forward, open plans in a co-working space environment may continue to co-exist with dedicated spaces but in a lower density avatar. This is because if density goes down, costs are sure to rise and would companies be willing to pay that much extra?

Both Ankur Gupta and Akshita Gupta, Co-founders of ABL Workspaces, agree.

"Co-working focuses on community building and social distancing propagates a completely different idea. The success of the co-working model rests on density and if density gets reduced the math would go wrong. The model would no longer be economically viable unless off course the cost of real estate goes down," they said.

The future workplaces will see changes in functionalities as well as the requirement for human resources and technology-- they would need to be multi-utility with cutting edge tech integration. This presents a great opportunity for companies to redesign their office spaces, said Gururaj Raghavendra, Director-Business Operations, Space Matrix.

"We are trying our best to suggest flexible solutions and remote working scenarios wherever possible. For instance, conference rooms that can accommodate a lesser number of people and multi-purpose meeting rooms with video conferencing facilities. Going forward, the seating arrangement in offices should likely be with a 6-10 feet space between two people," he said.

In COVID times, Investors Clinic, a real estate consultancy company has signed a 50:50 joint venture with Kocreate to enter the co-working space.

The company plans to open 5,000 new seats in Delhi-NCR.

“We have been trying to expand our business operations and co-working is the next big leap we are taking now,” said founder of Investors Clinic, Honeyy Katiyal.

Nidhi Marwah, managing director, The Executive Centre, South Asia, said that going forward, corporates would want to get back quickly to focusing on their core business and not the non-core business of how to run an office space. As there would still be uncertainty about how the economy would pan out, they would need to be flexible.

“Companies would require multiple touch down points for their employees in case there are curbs on long distance travel. Under such circumstances a flexible work option would work best.”

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Vandana Ramnani
first published: Apr 20, 2020 06:51 pm
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