Coworking spaces have disrupted the traditional work environment today, witnessing a massive growth in the last five years. The demand continues to gain momentum across India so much that about 13 million people are expected to work out of coworking spaces by 2020.
India’s burgeoning startup community and steady economic development are drivers of growth of the flexible workspace industry. In fact, India is the second-largest market for flexible workspaces in APAC, second only to China. A staggering $3 billion has been injected into coworking spaces in APAC in the past four years, according to CBRE research.
Coworking spaces have also grown rapidly in recent years, reaching a total footprint of just under 40 million sq. ft. as of H1 2018 in 16 major Asia Pacific cities including Bengaluru, Mumbai and Delhi NCR, shared CBRE.
The above-mentioned cities have also emerged as the hub of the co-working culture in India. As of June 2018, Delhi NCR, Mumbai and Bengaluru had approximately 2.9, 2.8 and 4.1 million sq. ft. of flexible space available respectively, which averages to about 2.83 percent of the total real estate inventory available for those cities.
An emerging and rapidly growing sector, the market for coworking spaces doubled in 2017. The growth sustained in 2018 and is expected to continue this year.
Let’s take a look at the key co-working trends that will shape 2019:
Large enterprises will embrace agile workspaces
Startups have been early adopters of coworking spaces, but the coming year will see corporates tapping into its potential as well. Few big names such as Amazon and Starbucks are leading this trend. The reasons for corporates go beyond cost savings. They are realising that working alongside young, energetic and like-minded people outside the conventional office set up can lead to innovation, boost in productivity and employee satisfaction.
Traditional industries to switch to coworking options
While technology and ecommerce companies have been flagbearers of coworking spaces, we believe more traditional sectors such as banking, insurance, manufacturing, etc. will fuel the growth of agile workspaces this year. Corporates today want to portray themselves as new-age companies with more modern culture to attract young talent. Providing flexible work options is a sound approach.
Niche coworking spaces to emerge
Today, coworking options are modern workspaces with latest amenities such as fast WiFi, conference rooms, snack bar, game zone, etc. However, they are generic in nature. They are for all kinds of people irrespective of their work or personality. According to Smartworks, we will see coworking spaces catering to particular industries sprouting in 2019.
The coworking industry will also have spaces dedicated to a specific type of people such as health aficionados with healthy snacks, gyms, etc. or night owls with facilities being open 24X7. Currently, about 41 percent are activity-based users, and this is expected to grow to 78 percent over the next two years, driving the growth of such sweeteners, says the CBRE report.
Tier II markets will see major growth
The industry has reached tier II cities in the past couple of years, and we believe this trend will continue in 2019. While Delhi, Mumbai and Bengaluru have the maximum number of coworking spaces in India, cities such as Chandigarh, Ahmedabad, Kochi, Indore, and Jaipur will see the swanky agile spaces mushrooming this coming year.
With office rents continuing to move up across India, the total area leased by co-working spaces in Tier I and Tier II cities could touch 6 to 10 million sq. ft. by 2020, according to CBRE.
Consolidation of players in the sector
Co-working spaces in India have witnessed more than 350 players jostling for the share of pie to be ahead in the sector and become sustainable in a short period of time. With more and more shared office spaces entering the sector, consolidation is imminent. A few large operators will rise-up and forge an association with the smaller firms for better economies of scale.
Automation and expansion of service offering
Majority of spaces host tech companies, but they themselves rely on manual processes. Coworking spaces will become tech-savvy themselves in 2019. Booking a seat or a conference room, generating an invoice, paying for services or maintenance bill, tracking attendance – all operational aspects will see automation. We foresee office management will be seamless, eliminating human error or bias.
Agile workplaces will also offer services beyond what is currently the norm. They will host investor meetings for startups, provide financial guidance, etc.
Productivity and collaboration efforts will increase
Productivity may be another aspect that will see a major shift at these spaces. Various facilities such as crèches and yoga classes will be incorporated to enable productivity.
Additionally, collaboration initiatives will be boosted to help people network and work together in a cohesive workplace. Events, workshops, seminars, and meet and greets will be hosted by coworking places. Smartworks’ ‘Smartweekenday’ programme provides networking and collaboration opportunities through its array of regular events, ranging from pet therapy, indoor games and tournaments, and stand-up comedy, among others.
Multi-location spaces to witness more growth
The jet-setting crowd prefers to rent coworking spaces that offer the flexibility of being leveraged in multiple locations. Travellers are opting for membership that can be used on the go. Keeping with this trend, a lot of coworking brands are planning to open up in newer locations.
Quality of coworking spaces will get better
The design, comfort and overall look and feel of co-working spaces is also likely to improve. The coveted Google, Facebook vibe will be the new normal. Modern interiors, trendy furniture, standing desks, and big screen TVs will be incorporated to grab a larger share of the coworking tribe. Recreational rooms will also be elaborate this year.
Cleantech and greener spaces will be an order of the day
The dream is to work at the beach or on top of the mountain. While that may not be possible for everyone, coworking spaces will incorporate more elements of nature to create a beautiful work haven. They will work towards helping workers relax to enhance productivity.
One of the key trends will be cleantech. We believe spaces will move to cleaner solutions to reduce their carbon footprint. Solar-powered energy, copper ACs, etc. will be used to make the space more efficient and curtail damage to the environment.
Co-working, a fast-evolving vertical, was a completely new idea just a few years ago. The industry has seen innovation being built in year-on-year. The above trends will make coworking even more fascinating as we see it grab a larger pie from traditional workplaces. The flexible workspace industry will further disrupt, and this year is definitely going to be exciting.