 "Investments")
Managed flexible workspace provider Simpliwork Offices is planning to invest Rs 750 crore next fiscal to expand its portfolio and raise up to Rs 2,800 crore in equity and debt for future growth.
Founded in 2018, Bengaluru-based Simpliwork Offices currently has an office portfolio of around 4.2 million square feet, roughly 50,000 desks, across major 8 cities.
Salarpuria Sattva, one of the leading real estate firms in the country, with a large presence in the office market, has a 50 per cent stake in Simpliwork Offices.
Kunal Walia, the founder and CEO of Simpliwork, along with some other investors, holds the remaining stake.
In an interview with PTI, Walia noted that the leasing of flexible office space rose during the 2022 calendar year, and demand continues to be strong from large enterprises.
The overall leasing of office space crossed 45 million square feet last year, after two years of slowdown due to the COVID pandemic, he highlighted.
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"Specifically, within that demand, we have witnessed a significant uptick for leasing activities for flex spaces," Walia said, adding that the share of flexible space demand in the overall office leasing has shot up to 16-17 per cent.
He mentioned that one out of five large enterprises now considers flexible workspace as a serious option for their expansion plan.
Asked about the expansion plan, Walia said the company is targeting to expand its portfolio to 6.5 million square feet by March 2024.
This will entail an investment of around Rs 750 crore, he added.
"We have identified Kolkata, Noida, Pune, and Chennai as significant growth centres. We are majorly banking on these four cities to drive our growth," Walia said.
To fuel future growth, Simpliwork Offices is also looking to raise a substantial amount through a mix of equity and debt.
"We will look at around USD 250-350 million in the next 18 months. Out of that, a part will be equity, while the rest will be loans," Walia said when asked about the fundraising plan.
He said the company is in talks with private equity players.
At present, Simpliwork has a presence in Bengaluru, Mumbai, Pune, Gurugram, Noida, Hyderabad, Chennai, and Kolkata.
"Delhi-NCR is our biggest market, followed by Hyderabad," he said.
Walia said the company is very bullish on the Kolkata market, where it forayed in June last year.
In Kolkata, it currently has a portfolio of about 1,80,000 square feet.
"We will look to double this portfolio. In FY 2023-24, we will have about 0.5 million square feet of space in Kolkata. We are currently one of the few sizable flex players present in Kolkata," he said.
In Kolkata, Walia said, the demand is clearly coming from very large outsourcing companies looking at talent.
"A large population, almost 35-37 per cent belonging to the eastern part of the country, has been operating out of tech centres in Hyderabad and Bangalore specifically.
"With work models changing post-COVID, while a lot of bespoke strategies are coming in, companies have become keen to provide office space closer to their employees' native places," he observed.
For the eastern part like Orissa, Jharkhand, Bihar, West Bengal, and the north-eastern states, Walia said there is a sizable population for whom Kolkata is the only large urban centre.
"So, we are seeing a lot of new companies coming into Kolkata for the first time ever. For most of them, we are their expansion partners, creating their first centres in Kolkata," he said.
Walia said the hiring in Kolkata has also been fairly strong.
Similarly, Simpliwork is looking to expand in Noida in a big way and is targeting to reach one million square feet area in three years from about 2,20,000 square feet now.
Asked about the company's turnover, Walia said it is growing at a strong double-digit growth every fiscal year.
He, however, did not disclose the company's revenue.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
