Co-working trends define office realty

Vinod Behl

According to a recent study by JLL India, the demand for flexible or co-work spaces is expected to grow at the rate of 40-50 per cent this year and by 2020 over 13 million people will be using co-working spaces — amounting to 20 per cent of the overall work space. This is changing the dynamics of office real estate market in the country as a number of big players are eyeing the ever-expanding co-working space market. Here are some key trends that are fueling the growth of this emerging sector:

1 Rise of the millennials: Today, the concept and design philosophy of flexible co-work spaces caters to millennial workforce as millennials are seeking flexibility and freedom to manage their work-life balance in a better way. They prefer open workspaces that are visually appealing and inspiring. Instead of the traditional workplace model, millennials opt for vibrant and collaborative work spaces that are tech-savvy and offer leisure and recreational facilities as well. Millennials are also taking up a lot of freelance jobs, and as such they look for offices that can be accessed any time and from anywhere and provide a better networking opportunity.

2 Boost to start-ups: With the government promoting its ‘Start-up India’ mission, the vibrant start-up ecosystem is leading to the growth of co-work spaces as entrepreneurs are opting for spaces that are cost-effective and provide a conducive environment for innovation. Real estate costs account for about 10-12 per cent of the overall operating cost. According to a Knight Frank study, there is a 5-15 per cent cost saving per seat in a co-work space as compared to standard office lease. Instead of leasing separate offices across multiple locations, it makes business sense to make use of shared offices at prime locations in different locations. According to industry estimates, start-ups will raise the demand of up to one lakh seats in co-work spaces by 2020.

3 Temp jobs & on-the-job mobility: With the rising trend of on-the-job mobility, an increasing number of people are no longer attached to single location and are looking for cost-effective and easily accessible plug-and- play offices in different locations. Corporates, too, are outsourcing work to freelance professionals, especially in advisory and consulting domain and shared offices are coming in handy. Such is the flexibility of these shared work spaces that one can take it on daily, weekly or monthly basis at very economical rates. This flexibility and customisation as per changing needs of customers has given a boost to the demand.

4 Emergence of Tier II-III cities: According to industry projections, a major part of the co-work spaces’ growth (40-50 per cent) is expected from Tier II & III cities. Most of the 13.5 million expected seats by 2020 will be contributed by smaller towns. The projected demand from Tier II & III cities is put at 8.5 million seats, with top six cities contributing five million seats.

5 High design quotient: Design is critical to performance and increasing popularity of co-work spaces is because this space is at the centre of the design scheme. There is enough personal space and every element is thoughtfully curated to facilitate work, play and social activity. Flexibility achieves the twin purpose of harmonious environment of community and collaboration and work-life balance. Furniture forms an important element of design with focus on nice, comfortable ergonomically adjustable desk chairs and standing desks etc. The design philosophy of leading co-work space players caters to millennials who seek experiential work spaces.

— The writer is founder, Ground Real(i)ty Media, a real estate content firm