Skootr to double its managed working space portfolio in Bengaluru by FY24

In past deals, US-based Pinnacle has leased 21,000 square feet of office space from Skootr at its facility in Hyderabad.

Managed office space provider Skootr plans to add 1 million square feet (msf) of office space across Bengaluru, Hyderabad and NCR, with more than 90 percent of developments in Bengaluru, during the current fiscal, Puneet Chandra, Co-Founder of Skootr, told Moneycontrol.

This will double its existing portfolio in Bengaluru from the existing portfolio of 1.1 msf. The company is eyeing a rental revenue of Rs 700 crore with the upcoming developments.

Currently, Skootr has about 3.5 msf of developments across the top 7 cities in India. It is also looking at major developments in Hyderabad and NCR regions; however, the company did not share further details on it.

Currently, the company has two business models: One is the managed working space where the company owns or holds the space to execute the fit-outs to lease it to the clients. In the second model, the client owns or holds the space and outsources the fit-out and monthly servicing to Skootr.

In past deals, US-based Pinnacle has leased 21,000 square feet of office space from Skootr at its facility in Hyderabad. Last year Skootr leased out more than one lakh square feet to Max Estates in a Noida office building for five years at a monthly rent of Rs 74.22 lakh.

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Major focus on Bengaluru

Chandra said that since October last year the company has restructured their expansion plan to be bullish in Bengaluru over the coming quarters.
Chandra estimated that 40-45 percent of business in the managed working space sector is coming from Bengaluru. In FY25 the company plans to add 2 msf of managed working spaces with a potential revenue of Rs 1,000 crore in Bengaluru.

"In the managed working space sector, most companies hold the real estate and do the fit-outs to service the space monthly. We are one of the few companies that provide similar services to clientele who continue to hold the real estate spaces. And Bengaluru being dominated by IT-ITeS companies, most companies are flexible in this model as it reduces the capex and also the risk tolerance," he added.

Booming sector

Chandra said the sector has witnessed a major uptick since its boom about 4-5 years back.

"We are also looking forward to entering the Pune and Mumbai markets in the coming quarters. However, currently, the flex space sector is witnessing major demand from MNCs, and thus instead of targeting new cities we are looking at corporates who want to opt for flex spaces," Chandra said.
According to a report by real estate consultant Colliers, India’s flex space stock is expected to touch 80 msf by 2026, forming 9–10 percent of the total Grade A office stock of the country.

With one-third of the nation's flex stock, Bengaluru continues to be the top market for flexible space, followed by Delhi-NCR. Prominent IT hubs like Hyderabad and Pune are also gaining traction and are predicted to expand more quickly as a result of growing demand from major technology companies.

Chandra added that IT-ITeS, financial, automobile and infrastructure sectors continue to remain their top takers. However, in places like Bengaluru, IT-ITeS and global capacity centres (GCCs) form the majority of the demand.