With the government issuing advisories that social distancing measures be practiced as a preventive strategy to combat the novel coronavirus, or COVID-19, outbreak, those working out of co-working offices have decided to work from home, impacting footfalls.
If the situation prolongs, there is a danger that growth targets of this segment may dip, say real estate experts.
Currently, investors are asking employees to work from home for the next 15-days, but if things worsen both co-working and co-living segments will feel the heat and there may be a general slowdown in shared spaces, they warned.
“If the coronavirus impact gets prolonged and threat perception around public places persists, growth targets of the co-working segment may fall by 40-50 percent, impacting overall business sentiment. Onboarding of new clients is also likely to get impacted,” said Anckur Srivasttava of GenReal Advisers.
Co-working offices are likely to see a temporary increase in vacancies, particularly in cities that are most vulnerable to a large scale outbreak.
However, Aashish Agarwal, Senior Director & Head- Consulting Services at Colliers International India, feels this disruption might actually help flexible workspace operators demonstrate the value of their offering and come back stronger as the economy recovers.
Even providers in the co-working space agree that most clients have started working from home and that clients have started delaying decisions. “While we have not seen much of an impact, if the situation prolongs we may see an impact on new opportunities with clients deciding to delay decisions. We are in the wait and watch mode for now,” Puneet Chandra, Founder, Skootr Global Pvt, said.
Ashish Goenka, Director, Redbrick Offices, said 32 percent of its clients have chosen to work from home. “We do not expect any further drop, unless the situation worsens significantly, or if, the government/ authorities step in to issue closure and stricter isolation notice,” he added.
But companies are fighting back. Awfis is extending IT support to employees of those companies that are choosing to work from home 'for a seamless experience', its Founder & CEO Amit Ramani said.
Buoyed by technology adoption, increased occupancy rates and growing investments, 2019 saw co-working space leasing touching 10.8 million square feet in 2019. Among the key markets, Bengaluru and Hyderabad accounted for about half of the flexible space take-up in India, CBRE South Asia Pvt said in a report titled 'India Flexible Space Digest – 2019'.