Managed office space provider Smartworks is planning to invest Rs 250 crore on 2.5 million sq ft of space in 2021 and ensure that its total footprint pan India touches 7 million sq ft. It intends expanding to cities such as Bengaluru, Hyderabad and Delhi-NCR, the company’s founder Neetish Sarda told Moneycontrol.
“During the pandemic we signed up close to 4 mn sq ft. We are now looking at adding another 2.5 mn sq ft pan in cities such as Bengaluru, Hyderabad and Delhi-NCR to ensure that our footprint touches 7 mn sq ft by the end of this year,” he said.
The company is scouting for space in both Noida and Gurgaon and hopes to add 700,000-800,000 sq ft in Delhi NCR. “We are in advanced stages,” he said, adding Noida alone will account for almost 60 percent of the total 700,000 sq ft.
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The company recently leased 2.5 lakh sq ft of space in Hyderabad’s Aurobindo Galaxy, taking its total operational space in the city to 4 lakh sq ft.
“In both Hyderabad and Bengaluru, we are considering adding a million sq ft each. We will also be finalising co-working spaces in Tier 2 cities such as Jaipur and Coimbatore. These would be smaller centres of 20,000 sq ft,” he said.
“There is a lot of demand for managed office space for the last few months. We have seen double-digit growth in leasing across the nine cities where we are present,” he said, adding the majority of their clients are enterprises.
Of late, the company has witnessed a rise in demand for seat lock-ins rather than total space take up. “As more employees return to work, companies are exploring co-working options rather than conventional office space to save on capex. Also, rather than locking into floors, they take up seats across multiple locations depending on the demand in that area,” he explains.
Citing an example, he said that – if a company had taken 500 seats across Bengaluru, Delhi-NCR, it would sign up on a flexible model that allowed it to reduce or increase the number of seats in a location depending on demand.
“This gives them the flexibility to also expand a particular business division. For example, it may decide to increase space for e-commerce and downsize logistics needs depending on demand. People are looking at flexibility and that is where we are seeing traction,” he said.
As for future plans, the company is planning to eventually invest in other segments such as proptech, facility management, warehousing and other real estate verticals, he said.
Founded in April 2016, Smartworks Coworking Spaces Pvt Ltd currently has 31 co-working centres, comprising about 60,000 seats and 40 lakh sq ft area, across nine cities.
Smartworks has operations in Delhi, Noida, Gurugram, Kolkata, Bengaluru, Mumbai, Hyderabad, Chennai and Pune. It mostly focuses on large corporates and its clients on an average take 250-300 seats.
Smartworks charges on an average Rs 10,000 per seat, with per-seat fee ranging from Rs 6,000 to Rs 30,000, depending on the location.
Flexible workspace operators are likely to lease about 3 million square feet of space across the top six Indian cities in 2021, as operators focus on signing large enterprise-level deals and cut down on speculative centres, Colliers has said.
During 2020, flexible workspace operators leased about 2.9 million square feet of space led by technology, and banking and financial services (BFSI) enterprises.
Despite large workforces working from home, as of March 2021, top flexible workspace operators across the top six cities have about 65 percent of their seats already leased, signalling continued confidence in managed workplaces.
As corporate occupiers continue to be uncertain about long-term office leasing plans in 2021 and 2022 and are still re-assessing their office space needs, they are exploring leasing desks in flexible workspaces to avoid long-term capital expenditures, and to get more flexibility on their lease terms, it said.
The total flexible workspace stock in the top six Indian cities is almost 30 million sq feet, equivalent to 4.3 percent of total Grade A and B commercial office stock.
Bengaluru leads the tally with a 37 percent share of the total flexible workspace portfolio, followed by Delhi- NCR and Mumbai, with 18 percent and 14 percent share, respectively. By 2022, flexible workspace stock is likely to account for 5.4 percent of the total office portfolio, led by demand for well-located, high quality and efficient flexible workspaces, it said.