Tier-II Cities Could Drive Co-Working Growth: 315 Work Avenue Chairman
Private estimates show that India’s co-working space might have over 30,400 service providers by 2022. In the same period, this fast-growing space could have an estimated 5.1 million member companies.
This segment has come a long way since the times when only start-ups and entrepreneurs planning to launch their new ventures, opted for co-working spaces on account of budgetary constraints. Today, multinationals are explore co-working spaces not just for cost effectiveness but also to meet the fast changing work needs of the country’s young working population.
To have a better understanding of how things will pan out in future for the co-working segment, Sneha Sharon Mammen, spoke to Manas Mehrotra, chairman, 315 Work Avenue.
Here are the excerpts of the interview.
Q: What does the future hold for co-working spaces?
Ans: The demand for co-working and serviced office spaces, has seen a new scale of growth, and is bound to witness a significant spike over the next few years. Co-working is becoming the preferred mode over conventional office space for the new generation workforce. Also, the demand for co-working is no more limited to start-ups and small-scale enterprises as now, even corporates and multinationals are opting for shared working spaces, opening up promising opportunities for investors in the commercial real estate segment. Technological integration will be a key driver of this growth by providing seamless and integrated platforms for managing distributed workspaces and the growing needs of today’s workforce.
The potential market size of the co-working segment across India is expected to be 13.5 million users by 2020, and up to 10.3 million seats of co-working spaces will be occupied by enterprises. Freelancers and small and medium enterprises (SMEs) may contribute 1.5-million user worth of demand and start-ups are expected to demand around 100,000 seats.
Q: Do co-working space providers also look into the residential dynamics of a city? Could it be a walk-to-work option for people?
Ans: Yes. It is quite important to look at the overall dynamics of a locality. Co-working spaces are largely located in the central business districts (CBD) as guests and clients come from multiple residential areas. However, co-working offices are also located at residential areas. We, for instance, have offices at Indiranagar, HSR Layout and Koramangala, etc., in Bengaluru which are highly preferred residential hubs. In these areas, the option of walk-to-work could work well.
Q: Do you think co-working spaces in areas far from the CBDs add to the residential prospects of a city?
Ans: Residential areas in suburbs would benefit greatly by the presence of co-working spaces. The walk-to-work option would be available and many guests and clients will go in for these spaces. The best option, however, is to strike a balance between CBDs and residential areas and get the best of both.
Q: What are your expectations from the new government as far as the co-working space is concerned?
Ans: We expect the government to allocate funds exclusively for developing infrastructure and improving connectivity in the peripheral areas of cities, especially in metros. This will spur growth in the future. The government should also focus on building start-up hubs across the country to drive entrepreneurship and consider relaxing the regulatory compliance.
Undoubtedly, there is potential within the start-up community but it will all boil down to how much room they get to manifest their potential. The government can nurture entrepreneurship by funding incubation centres and focusing on creating inclusive development and a favourable environment for entrepreneurs and bring favourable reforms for start-ups, which in turn will aid job creation and growth. Finally, it should focus on taking steps to encourage the spirit of entrepreneurship amongst the youth.
Q: Among small cities, which are the best bets for a co-working environment to grow?
Ans: While metros are witnessing an exponential growth at present, we believe that the next cycle of growth in this segment will be driven by Tier-2 cities such as Jaipur, Bhubaneswar, Ahmedabad, Indore, Rajkot, etc., due to the increasing number of start-ups in these cities. We also believe that the smart cities programme will further drive the growth of co-working in Tier-2 cities in the future.