Millennials drive demand for flexible workspaces that are seen as places for collaboration, networking and innovation
Flexible workplaces occupy more than 8.1 million square feet (msf) of space spanning across the top eight cities in the country. In the first quarter of 2018, leasing by flexible workplaces accounted for 11 percent of the total leasing, says a report by Cushman & Wakefield titled Who Moved Your Workplace? Flexible Workplace On Turbocharge Mode.
These co-working spaces have become a place for collaboration, networking and innovating with like-minded millennials, says the report.
“Millennials are a formidable part (46 percent) of India’s workforce. This workforce is now venturing into freelancing, entrepreneurial and temporary work opportunities, making up for a large percentage of people opting for flexible workplaces. The number is only set to grow as a higher number of millennials enter the workforce, propelling the nation’s labour force to the world’s largest by 2027. Not only freelancers but large corporations are also partnering with co-working spaces so that companies have better access to innovators, innovations, talent, work-life balance and reduced real estate costs,” says Anshul Jain, country head and managing director, Cushman & Wakefield India.
This number of flexible workspaces is led by the hub of startups, Bengaluru. The city accounts for over 32 per cent of the total flexible workspace stock, with about 58 percent of the co-working space located in suburbs of Bengaluru such as Outer Ring Road, Hosur Road and Koramangala.
On the other hand, Mumbai stood second with 25 percent stock. Majority of such centres in the financial capital of the country are located at the western suburbs between Bandra and Goregaon.
Who are the demand drivers?
Startups, freelancers and corporates are the demand drivers for the shared working space segment.
Fueled by startups: India is going strong with over 5,200 startups operating in the country. The country today stands at the third position in terms of the number of startups only after China and the US. Poised to grow 2.2 times to reach 10,500 by 2020, the startups will remain the dominant clientele for co-working spaces.
A business solution for corporates, too: The concept of contractual jobs is now picking up in the corporate world. On-demand jobs, outsourced services and short-duration team put together to make up for a flexible workforce that can be easily accommodated in a shared working space. This allows the corporate to lease a space for a selected period of time. Leasing co-working space is also beneficial for corporates planning to foray into new geographies without incurring high expenditure. Some corporates that have leased co-working spaces in top cities in the country include as Adobe, Cisco, Gartner, E& Y, Dell, Airtel, Nearbuy, Xander, Godaddy, HSBC, Truecaller, etc.
Easy on the pocketAccording to the study, costs incurred in a Tier-I co-working space in CBD and suburban locations is 20 percent lesser when compared to a Grade A 60 sq ft traditional office. For instance, in Bengaluru’s CBD location, co-working flexi-seat rental is 20 percent cheaper than traditional Grade A office of 60 sq ft in the same location while the numbers stand on par in Gurugram and in Mumbai these seats are 8 percent cheaper.