With a client base that includes names like White Hat Jr. Byju’s, Zomato, Airtel, Paytm, Caratlane, Bridgestone, HDFC Bank and others, managed workspace provider Incuspaze’s ‘revenue has grown 3X over the last one year and is anticipating similar growth rate over the next 12 months’. Sanjay Chatrath, Managing Partner – India business, Incuspaze, said, “We added over 6 lakh sq.feet to our portfolio in the last 3 months. We anticipate a similar growth over the next 12 months in terms of revenue and adding about 0.5 million sq.feet across key cities by the end of this year,” he told FinancialExpress.com.
Co-working spaces are seeing a rise in demand with India Inc adopting flexible working models in the ‘new normal’. In terms of leasing spaces, Incuspaze leases 600-1200 seats to large enterprises for tariffs ranging from Rs 8000 to Rs 18000 per seat in metro cities and for Rs 6000 to Rs 8000 per seat in small towns. FinancialExpress.com talked to Sanjay Chatrath on the rise in the demand for co-working spaces by large enterprises as well as startups, sectors looking for co-working spaces, the brand’s expansion plans in metros as well as tier-II and beyond towns, among other things.
Edited excerpts from the interview…
How is the co-working spaces industry performing currently? What kind of growth are you witnessing in the segment?
The startup culture in India has created an increased demand for innovative workspaces. Additionally, the pandemic has also urged large scale businesses to step out of the conventional and look at managed workspaces as a more practical way to operate across the country. The industry has seen a stable growth of 21 per cent from 2021 onwards. We believe the same trajectory will continue. At Incuspaze, we’ve added 6,00,000 sq.feet to our managed workspace portfolio in the last 3 months itself and on boarded some of India’s leading brands.
Our revenue has grown 3X over the last one year, with us adding over 6 lakh sq.feet to our portfolio in the last 3 months. We anticipate a similar growth over the next 12 months in terms of revenue and adding about 0.5 million sq.feet across key cities by the end of this year.
Are co-working companies also performing in tier-II and beyond towns, along with metro cities?
Well, co-working spaces are already moving to tier-II and -III cities and have become quite integral to cities like Bhopal, Indore, Ahmadabad, Jaipur, Pune, Surat, Udaipur, Rajkot, and Kochi. As organizations adopt a hybrid work style that gives employees a choice to operate out of satellite locations, even leading technology companies and consultancy firms are signing up for huge flexible office spaces across tier-II towns. The idea is that while expanding to the tier-II and -III cities, the big brand is not looking to invest in a traditional but rather in a managed workspace that gives them time to study the market and expand their team accordingly. Managed workspaces are additionally assisting entrepreneurs in finding new talent in the regional markets who collaborate with them on a daily basis, which lowers the cost of hiring. We’ve seen high demand from smaller cities from enterprises – both international and domestic.
What kind of companies/ firms are looking for co-working spaces and in what regions? What kind of seats/ capacity are they approximately looking at?
The beauty of working out of a managed workspace is that anyone can use it. Domestic and international enterprises of all sizes and categories are attracted to managed workspaces. We, at Incuspaze, see a lot of interest from the IT, Education, Banking, Telecom, Software services sectors. Also, startups of every category are also keen on managed spaces like ours. On average, we lease 600 to 1200 seats to large enterprises. For smaller companies, the capacity varies depending on city-based needs. Our clientele includes White Hat Jr. Byju’s, Zomato, Airtel, Paytm, Caratlane, Bridgestone, HDFC Bank and others.
What are the charges/ tariff like for spaces by Incuspaze? How do tariffs differ between small towns and metro cities? What are the usual duration of leases from companies?
In metro cities, the tariff ranges from Rs 8,000 to Rs 18,000 per seat whereas in small towns the tariff on average is between Rs 6,000 to Rs 8,000 per seat. Our lock-in periods can range between 6 months to 3 years depending on client requirements. We also work on reverse leasing with clients who want to downsize within their current portfolio or are looking at evaluating complete exit strategies.
Do you think with the pandemic effect slowly subsiding, there will still be scope for co-working companies across the country, going forward?
Pandemic proved the capability of a hybrid work model, and going forward, we believe the demand from startups and corporates will only grow. By the end of 2023, the coworking space market is anticipated to have expanded by an additional 50 million sq.feet. Managed workspaces have a bright future, especially in India, and the growth curve will continue to move upward in the next few years.
Tell us about your expansion plans.
We are looking at a massive expansion over the next 6 months and are hoping to add half a million sq.feet to our portfolio by the end of the year, across key cities. We are also focusing on acquiring more stand alone buildings so that we can offer value add services to our clientele.
How do you see competition in this space?
The coworking and managed workspace market in India is a billion-dollar industry. We believe there is healthy competition between the players and that there are multiple options and areas available for everyone. In terms of strategy, we have a first-to-market strategy in tier-II and -III cities. We also give our clients flexible contracts that they can customize to suit their needs. We also offer businesses a variety of cutting-edge work tools in technologically advanced workspaces. Everything from a very fast internet connection and dependable power supply to sophisticated building access and online meeting room reservations.