From traditional cubicles to smart cabins, co-working is back with a bang

Demand fuelled by hybrid work models, digital nomads, post-Covid urban loneliness

At 11 am on a rain-washed day, Akasa, a four-storey co-working space in Noida’s Sector 62, is bustling with activity. The 800-seater, Vastu-themed office, which opened in the middle of the pandemic in October 2021, is now 80 per cent occupied.

Operating out of the space – which has conference rooms with AI-enabled smart TVs, soundproof meeting pods and Alexa-driven lights – are employees of information technology (IT) firms like GNAP Services and GeoTech, and start-ups such as Khalsa EV. This mid-morning, like on other weekdays, its rooftop cafeteria is busy as people break for coffee and snacks.

Akasa reflects what recent data indicates: that demand for co-working spaces has doubled post-pandemic as compared to 2019. Property consultant Anarock says in terms of office space, the share of IT and ITeS (IT-enabled services) sector, which is a major demand driver, has shrunk from 49 per cent in H1 2021 to 36 per cent in H2 2022. As a result, sizeable demand for co-working spaces is coming from IT firms and start-ups.

Akasa, which has offices in the Delhi National Capital Region (NCR), Kolkata, Bengaluru and Guwahati, is seeing 75 per cent average occupancy in all its centres. Countrywide, its clients also include Mitsubishi Corporation, Ascentspark, MyFab11, and 5D Virtual Design & Construction.

During the pandemic, co-working rentals across the big cities fell by about Rs 1,500. “With businesses gaining momentum, the rentals are now back to pre-pandemic levels, and average rates are even going up,” says Aditya Mehta, CEO, Akasa Coworking.

Adds Vivek Rathi, director-Research, Knight Frank India: “Occupiers have found value in the co-working product’s attributes of flexibility, plug-and-play workspaces, lower lease term lock-ins, and in moving cost heads from capital expenditure mode to operating expenditure.” 

With increased business uncertainty amid the pandemic, corporations have chosen to retain flexibility in their workspace strategy, which has favoured such flex space models, he says.

About 8.5 km away from Akasa, the scene at Office ON, a co-working space in Noida’s Sector 2, is much the same.

“After isolation for so long, collaborative spaces like these were much needed for work,” says Shailja (she uses only her first name), an operations manager with a fact-checking website that has rented four seats at Office ON. “Our dependence on technology has increased manifold since the pandemic and these spaces are meeting that requirement at low costs.” 

Many co-working offices have invested more in technology now and introduced smart boardrooms, conference halls and washrooms, besides virtual offices.

Investments are also being made to bring in cloud-based collaborations and AI-based innovations, says Mehta. And of them many are adopting sustainable options like solar panels to conserve energy, he adds.

For women, many of whom dropped out of the workforce or whose responsibilities multiplied during the pandemic, flex spaces are in big demand.

“Co-working is best suited for us as we are able to manage home and work efficiently,” says Shubhangi (she gives only her first name), who works for a New Zealand-based company. Office commute time is saved; there are more networking opportunities; and these places are safe, she adds.

With several people still working from their native places, demand for co-working spaces has also shot up in tier 2 cities like Bhubaneswar, Chandigarh and Jaipur, where rentals are also less compared to metros.

According to real estate consultancy JLL, as of March 2022, rentals across major cities such as Mumbai, Bengaluru and Kolkata ranged from Rs 6,300 to Rs 25,000 per seat per month. And in smaller cities such as Bhopal, Chandigarh, Lucknow and Kochi, these were in the range of Rs 4,000 to Rs 6,800 per seat a month (see table).

The 14-odd per cent increase in the number of gig workers in 2021 has also fuelled demand as people looked for alternative job options with temporary spaces for short-term projects.

“There is no boundation or contract to be signed for a fixed period here. We can book our seats even for a few hours or a few days and still get professional office set-up, networking opportunities and conference spaces,” says Nishu Singh, a Delhi-based software developer with Parallel technology team.

Such spaces also provide entertainment facilities for short breakouts like a resting lounge, gym, gaming corners, cafeteria and garden. These are good for an employee’s mental well-being and productivity, Singh adds. 

There’s another reason for the rising demand, says Abhishek Tripathi, co-founder of Settl, which provides co-living spaces in multiple cities. “Urban loneliness has been a major factor in people’s decision in the post-Covid world,” he says. A huge rise in the number of digital nomads and gig workers has also resulted in common areas of properties becoming a networking ground for the modern hybrid workforce, he adds.

According to real estate investment firm CBRE India research, 73 per cent of workplaces in the country now allow for hybrid working. The firm projects flexible space office leasing activity in India to cross 80 million sq ft by the end of 2025.