lexible workspace provider IndiQube is planning to add 35-40 properties to its pan-India portfolio in the next financial year, including expansion in tier-2 cities, said the company’s co-founder and chairman Rishi Das.
“The way things are, we will be signing up at least two-three properties a month,” he told FE in an interaction. IndiQube currently operates 85 properties across 12 cities in India, among which are tier-2 cities such as Coimbatore, Madurai, Kochi, Jaipur and Lucknow.
Das said the company is entering tier-2 markets based on both demand from multinational companies as well as strategic planning and will likely add 20-25 properties in these markets over the next two-three years. Besides tier-2, the company will also deepen its presence in key areas of tier-1 cities such as Mumbai and Bengaluru.
“So over the next two-three years, our playbook will be that be present in all micro markets across tier-1s, present in all meaningful tier-2s and wherever you see that you have an early mover’s advantage, just go for the kill,” Das said.
However, the company often faces a lack of supply of compliant commercial buildings in tier-2 cities. “With the exception of Kolkata and Ahmedabad, I don’t see any other tier-2 city in India having good supply,” Das noted.
To make up for the crunch in supply, IndiQube is entering build-to-suit or joint development agreements with local landowners in cities such as Coimbatore. The company also has a team that offers development management services to landowners.
Renovation – a ‘big’ opportunity
Besides built-to-suit, the company is seeing a big opportunity in renovating old buildings into workspaces, particularly in crowded commercial areas in large cities. “50% of the portfolio in Bengaluru today, which is the largest market for us with about 3 million square feet, comprises renovated buildings,” Das said.
Renovating old properties is faster and cheaper than constructing a new building. For these properties, IndiQube usually signs a long-term lease for 20-30 years and upgrades the infrastructure to suit a high sustainability standard, which allows them to qualify for discounted loans for green buildings. “We are absolutely aggressive on this because we believe that is the way to grow in India. Pick up older properties, renovate them, take them for 20-30 year leases, bring them back to life,” Das said.
Financial forecast
The company is aiming to end the current financial year with a topline of Rs850 cr, which will mark a 47% rise on its FY23 sales of Rs580 cr. In the financial year 2021-22, IndiQube had recorded sales of Rs 350 cr.
The company posted a profit before tax of Rs 20 cr in the last financial year. However, Das refrained from giving any guidance on profit for the current financial year. “I don’t know what kind of recovery we are likely to see from January. So, it is difficult to give a guideline on that,” he said.
The company has so far raised $45 million in funding over four rounds and currently has a valuation of $229 million, as per data from Tracxn. Das said he is looking to raise further funding in the later part of next year.
Room for growth
IndiQube plans to enter tier-2 markets, with plans to add 20-25 properties here in two-three years
It will also deepen presence in key areas of tier-1 cities like as Mumbai and Bengaluru
The company is banking on renovating old buildings into workplaces
In fact, half of its portfolio in Bengaluru, its largest market, comprises renovated structures