Companies, startups more inclined towards coworking spaces: Anarock

In the top seven cities in India, there was a 90% jump in net coworking space absorption between Q4FY19 and Q4FY23

The share of co-working spaces in office real estate in India jumped to 27 per cent in the quarter ending March 31, 2023, from 14 per cent in the pre-pandemic quarter ending March 31, 2019, data from real estate consultancy Anarock showed on Tuesday.

In the top seven cities in India, there was a 90 per cent jump in net co-working space absorption in this period, from 1.3 million sq ft in Q4FY19 to 2.18 million sq ft in Q4FY23. Bengaluru and NCR together accounted for 66 per cent of net co-working absorption in Q4FY23.

"Coworking spaces demand weakened considerably after Covid-19 disrupted the workplaces equation across the country. We're seeing a decisive reversal of this negative trend now, with coworking particularly attractive because of the disrupted IT/ITeS employment scenario," said Utkarsh Kawatra, senior director - myHQ (ANAROCK Group).

"Many companies continue to follow a hybrid working culture, which involves setting up smaller satellite offices or remote teams using neighbourhood on-demand coworking spaces. All these use cases bode well for the coworking industry," he added.

The demand for coworking space was the highest in South India. Bengaluru, Hyderabad and Chennai together witnessed net office absorption of 4.6 million sq ft in Q4FY23. Of this, 26 per cent was by coworking players.

In west India, Mumbai Metropolitan Region (MMR) and Pune saw net absorption of 1.48 million sq ft office space in Q4FY23. Of this, 24 per cent was by coworking players.

In NCR, 32 per cent of 1.89 million sq ft absorbed office spaces were by coworking players.

According to Kawatra, in Delhi NCR low commercial space vacancy levels have fostered a rich growth environment for coworking setups in areas such as Gurugram and Noida.

Kolkata saw a mere 0.25 million sq ft office space absorbed in Q4FY23, of which 12 per cent was by coworking players.

Anarock said that several companies continue to follow a hybrid working culture. This involves setting up smaller satellite offices or remote teams using neighbourhood on-demand coworking spaces.

"All these use cases bode well for the coworking industry," it added.

"Going forward, we are likely to see developers of commercial office assets across the country align with such operators and carve out specialised coworking spaces for them," the company said.