Leasing of office space by co- working operators may double in 2017 to 1.5 million sq ft with the concept of shared office space gaining momentum in the country, according to property consultant CBRE India.
CBRE South Asia in its report 'The Art of Co-Working' has projected that leasing could touch 10 million sq ft by 2020.
"While demand more than tripled in 2016 to touch 0.7 million sq ft as compared to 2014, this year (2017), leasing is expected to cross 1.5 million sq ft. With the concept of shared office space fast catching up in India, leasing is expected to touch 10 mn sq ft by 2020," CBRE said.
The report highlighted that shared office spaces fall into 3 categories - traditional business centres, co-working spaces and incubators/accelerators.
There are close to 350 shared office operators present in India, spread across 800 locations in tier 1 and tier 2 cities. However, 85 per cent of shared office space in India is in tier 1 cities and the rest 15 per cent in tier 2 cities.
"With Bengaluru, NCR (Delhi, Gurgaon and Noida) and Mumbai being gateway cities, 75 per cent of the shared office spaces are based in these three locations. Each has more than 100 shared office spaces followed by Hyderabad, Chennai and Pune," the consultant said in a statement.
More than 90 per cent of business centres and co-working spaces are present in tier 1 cities, almost half of incubators/accelerators are present in tier 2 locations.
CBRE said the most significant benefit of a co-working space is the cost saving, up to 25 per cent in big cities, as compared to a conventional space leasing.
"India's office market has seen sustained growth in the past few years. It is also one of the most dynamic segments of real estate, witnessing numerous advancements, whether it is technology driven, design related or with regards to workplace strategies.
"With the global economy continuing to expand and India emerging as a hotspot for corporates expansion strategies, it is only natural that concepts such as shared offices/co- working spaces would pick up pace," said Anshuman Magazine, Chairman, India and South East Asia, CBRE.
The consultant listed out some of the demand drivers for co-working space -- occupier focus on business operations over RE decisions, increasing occupier awareness of co-working as an alternate option, the rising acceptance of 'remote' working and an increased preference towards flexible leasing terms.
Initially, the CBRE said, co-working spaces focused on providing solutions for entrepreneurs and start-ups, but now the concept is catching up with established corporates.
This is on account of the benefits that such spaces offer - affordability, negligible capex requirements, efficient space usage and flexibility to expand and contract at short notice.
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