By Mr Kushal Bhargava,
The COVID-19 pandemic has changed the way the world lives and works. As social distancing and de-intensification of workspaces became a norm, more organisations started relooking at their requirements for office space. Compared to pre-pandemic levels, the demand for physical occupancy is still low in offices. Companies are exploring opportunities for more flexible office models as some of their employees continue to work from home. But we are currently witnessing a major spike in the demand for co-working spaces, to fill in for various verticals that cannot work remotely.
To put this in perspective, the concept of co-working spaces has been picking up in India since the past few years even before the pandemic was anywhere on the radar. It has grown from an approximately 5% share in 2016-17 to about 15% in 2019. Its share in transactions has grown majorly in markets of Mumbai, NCR, Bengaluru, Pune, Hyderabad, Chennai, Ahmedabad and Kolkata. As per a report by real estate firm JLL India, flexible work spaces are expected to reach 50 million square feet in next 3 years growing at an average of around 15-20 percent annually.
There are a number of reasons why the pandemic has created an upswing in the demand for co-working spaces.
One of the primary reasons is that co-working spaces offer immense flexibility. Many companies – especially small and medium scale organisations — are finding it financially unwise to maintain office spaces on a long-term lease during the pandemic. The co-working segment is helping them fill the gap through hassle-free services where the overall costs for the setup are seminally lower. This is especially true in expensive commercial real estate markets where space availability is already limited.
Besides, though remote working is likely to last much longer, not all remote workers have access to the amenities they need to productively work from home. In some cases, people need access to a collaborative environment. In the present environment, as majority employees are working from home, organizations are preferring workspaces that act more like just meeting grounds. Co-working spaces fit the bill perfectly because they can offer this facility and provide a better convenience through plug-and-play options.
Such flexi spaces bode well with corporate occupiers who now have restricted budgets for interiors and other office maintenance. Co-work spaces are also able to provide dynamic infrastructure for the younger workforce along with other advantages like collaboration and a sense of community.In tier 2 and tier 3 cities, companies are largely demanding pan-India meeting spaces so that their employees can visit at intervals for personal interactions while working remotely rest of the time.
Another area where there has been a spike in demand is the need for office space to meet compliance requirements. Most businesses are looking for cost-effective alternatives especially when an office space is a legal compulsion to meet compliance or GST needs. This mandatory requirement has created a demand for single workstations or dedicated workspaces to accommodate the needs of corporates who wish to meet regulatory compliance, but do not want to invest in bigger spaces.
Co-work spaces also have the ability to quickly re-structure as per needs of a company. Many corporates are opting for co-work spaces as they can use them to adapt to the new working styles that include flexible work hours where the workforce comes in batches. Such spaces are able to leverage technology to ensure minimal physical touch-points — a must-have in these times.
The pandemic has also abruptly defied years of corporate real estate and workplace design decisions by questioning the need for large office spaces. Many corporates have opted to give up part of their office space to save real estate costs. With organizations maintaining work-from-home for the foreseeable future, some of our clients are requesting us to set up offices for them to cater to their limited staff. Many of these are companies with a robust presence in Tier 1 cities. However, with Tier 2 and Tier 3 segments showcasing some great potential, they wish to shift their focus to these towns for future growth. For their new office spaces, most have envisioned how they will use it which has shaped their design ideas. So, we have requests for specific setups for facilities like meeting room, electrical room, server room, in short, a conventional setup, albeit in a shared space.
Some companies also want co-working spaces in specific areas as they can reduce employee commute and minimize the risks of exposure. This is one of the biggest paybacks of co-working spaces as they can give companies the power to control their environment in order to ensure that Health and Safety protocols,social distancing and other measures are effectively implemented. They can also try to alleviate any exposure that employees might have to risk-prone areas. Co-work space providers are also delivering on the Health and Safety quotient through robust technology by creating contactless, safe and agile work experiences.
Another area where we are witnessing increased requests is managed office spaces. Managed workspaces is a unique concept where we offer individually tailored workspace solutions. A managed workspace achieves flexibility and cost-effectiveness while delivering the benefits of a traditional leased approach. As a managed workspace solution provider, we handle the holistic process beginning with defining the client’s workspace requirements and advising them on the right solution for their business. Then, based on comprehensive market search, we help them shortlist options in their preferred city and location. Once the location is finalised, we undertake the process of designing, creating and fitting out the space to match their requirements. This is followed by procurement of furniture, fittings, IT and telecommunication needs and,ultimately, managing all the elements of the office operations once they have moved in.
For dynamic businesses, managed workspaces are an ideal setting, especially during this time because they render them with the freedom and flexibility to focus on their core business while the setup is taken care of. The client pays just one fixed amount each month for all services without the hassle of worrying about separate utility bills and housekeeping. In the long run, this works out to be more cost-effective.
In recent months, co-working spaces have become a fully integrated workspace solution platform for companies, offering products to the entire range of work requirements including the remote working. Once the pandemic is over, businesses may still continue re-evaluating their investments for an office space. More and more companies will look for flexible options to fulfil their changing requirements, instead of opting for longer-term eases.The coworking industry will most likely continue to see significant demands as companies realise the increasing need for flexibility and cost-effectiveness.
(The author is Co Founder, MyBranch. Views expressed are personal and do not reflect the official position or policy of the Financial Express Online.)