The launch of co-working spaces has created a new segment in commercial realty and the rising demand for such shared spaces, across metros and tier locations, have re-defined the consumption of office spaces in India. With exponential demand, leading global and domestic co-working space providers are now building infrastructure to cater to new age entrepreneurs, startups and MNCs.
Spaces, a part of the Amsterdam based co-working space provider, recently launched their 6th property in India at Adani Realty’s Inspire Hub property in Andheri, Mumbai and WeWork, another leading co-working space provider, have already built their strong presence across all leading metros and Tier 1 locations in India. Both, international and domestic co-working space providers, are looking at building a strong brand presence through innovations and customised solutions on the back of high demand from all metros and tier locations.
Manish Joshi from NewsBarons connects with Rohit Gopalani, Vice President & Head – Commercial Business at Adani Realty who informs ‘Co-working space provide startups with customized solutions that help them to control cost and focus on their business’.
NB: Co-working spaces has been redefining office demand and supply across main locations?
Rohit: The concept of co-working spaces has revolutionalized the demand and delivery of offices spaces in India and it is a boon for early age startups. Co-working spaces provide customized solutions to cater across the spectrum of startups, professionals and MNCs as per individual requirement of space and services. There is a huge savings in terms of cost of space as co-working spaces provide users with the options to increase or reduce spaces utilization (sitting capacity) depending upon workforce strength and usually include all services like wi-fi, meeting rooms, cafeteria and usage of common facilities amongst other services within the same cost structure.
NB: Do you believe supply will overtake demand with so many co-working spaces being developed across nation?
Rohit: India is the third largest startup hub globally and this number is expected to double in the coming year. In a short span of less than 2 years, we have over 200 co-working space providers across India. The demand for co-working spaces across metros and tier locations will rise further in the coming years with the growth of startups and foray of multi-national companies into India. If we go by existing data, the co-working space demand has nearly touched 13 million square feet during the first quarter of 2019.
NB: Which are the high demand locations for co-working spaces in India?
Rohit: Mumbai, Bengaluru and NCR have witnessed high growth of co-working spaces along with locations like Pune, Hyderabad and Chennai, which are likely to generate a higher demand in comparison to the previous year.
NB: Commercial Realty has witnessed growth in the last few years?
Rohit: There is a huge positive sentiment about commercial realty with high demand being generated from IT&ITES, pharma, fund houses, co-working spaces, startups and e-commerce players across major locations in the country. Commercial realty remains unaffected by factors that impact residential realty like tax-breaks and interest rate fluctuations. Warehousing and other rent yielding assets have generated huge interest amongst global and domestic investors.
NB: Adani Realty has strong focus on developing the commercial segment?
Rohit: We have a huge line-up of commercial development in Gurugram, Maharashtra and Gujarat. We have exhausted all retail spaces in our Inspire Hub project in Andheri, where Spaces launched its co-working space, and we are moving equally strong with the delivery of our Inspire BKC project in Mumbai.
NB: What is your opinion on the first REIT IPO?
Rohit: The success of the first REIT IPO listing is a positive indicator for the commercial segment. REIT listing has created a new avenue for fund generation into the commercial segment. As per a JLL report, existing office stock worth $35 billion is eligible to be listed under REIT.