Keppel Land Limited (Keppel Land) has invested $25mn in Smartworks Coworking Space Pvt. Ltd (Smartworks), a leading Pan-India flexible space solutions provider with a presence in nine major Indian cities, namely, Delhi, Noida, Gurgaon, Kolkata, Bengaluru, Mumbai, Hyderabad, Chennai and Pune.
Founded by Neetish Sarda and co-founded by Harsh Binani in April 2016, Smartworks has grown rapidly to become India’s market-leading provider of quality flexible spaces for enterprise companies. Presently, Smartworks has 23 operational centres in nine cities offering a total of about 43,000 workstations spread over 2.3 million sf. Its centres currently cater to over 400 organisations, comprising mainly large enterprises and high-growth startups such as Amazon Web Services, Bacardi Limited, DHL, Ernst & Young, Hitachi, Jaguar Land Rover Automotive PLC, Microsoft Corporation, Petronash, Red Hat, Ricoh and Samsung. Over the next five years, Smartworks plans to grow its footprint to 20 million sf and provide office solutions for over 200,000 working professionals.
Tan Swee Yiow, CEO of Keppel Land, said, “Smartworks’ innovative business model, coupled with its strong knowledge of the Indian enterprise office segment and execution abilities, is highly scalable and relevant, particularly in India’s growing market for commercial office spaces. This investment allows Keppel Land to enter one of the world’s fastest-growing flexible office markets, opening doors for further growth through this collaboration.
“There are also many opportunities for cross-learning and collaboration between Smartworks and Keppel Land’s smart serviced co-office platform, KLOUD, which currently has a presence in Singapore, Vietnam and Myanmar.”
Mr Neetish Sarda, Founder of Smartworks, said, “We are delighted to partner with Keppel Land, Asia’s premier real estate developer and multi-faceted property company. We are excited to continue driving our exponential growth in our mission to deliver lasting and affordable office experiences with state-of-the-art office infrastructure and recreational facilities for India’s leading enterprises in partnership with Keppel Land.
“The flexible space segment in India has been growing rapidly, and Smartworks has been an active participant in this business over the past three years, with a large and widespread network across nine cities. Smartworks is also already cash flow positive and is profitable at a consolidated level. With this strategic investment by Keppel Land, we will be able to scale up even more rapidly across India’s Tier 1 and Tier 2 cities and further invest in building up our next generation product, improving client experiences, as well as boosting our talent and technology.”
Smartworks provides office spaces which can be rapidly configured and customised in just four to six weeks according to the needs of their enterprise clients, offering a full suite of solutions at a value price point without upfront capital expenditure. All of its centres include common amenities such as cafeterias, meeting spaces, training rooms, crèches, gymnasiums and first aid clinics, which have been well-received by clients. Smartworks was also the first agile space provider in India to use a humanoid robot for operational duties.
Strong economic fundamentals, growing urbanisation and the government’s pro-business policies have led to India attracting an influx of foreign investment across all sectors, in particular, the property market. Leasing activity in the commercial real estate segment rose by 40% year-on-year (y-o-y), crossing 30 million sf in the first half of 2019, the highest recorded, and is poised to reach 50 million sf by end-2019. Within this segment, the flexible space market has risen by 52% y-o-y in the first half of 2019.
The above transaction is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.