India’s startup community banks heavily on the services provided by Co-working spaces due to its low cost of acquisition along with a host of other services like concierge, networking, hospitality and conference rooms for meetings amongst others. Co-working spaces are also an attractive proposition for MNCs for testing markets and large corporates have also started looking at co-working spaces to provide value-added services that can engage and retain their millennial work-force.
THE MOSAIC, a wellness theme based co-working space in Mumbai, has a mix of start-ups, professional freelancers, established corporates and non-government organisations as its members with an occupancy rate of over 80%. The company will soon expand its presence to other important location like NCR, Bengaluru, Hyderabad and another space in Mumbai taking the total to 5 centers.
Manish Joshi of NewsBarons connects with Gokul Das, MD & CEO of The Mosaic who informs ‘There are approximately 300 shared workplace operators in the country at present operating almost 720 centres across urban India’.
NB: What are the advantages that startups get through co-working spaces?
Gokul: Globally co-working office spaces have become popular as they are cost effective, they offer flexibility in both increasing and decreasing seating requirements and there is no fixed capital investment required to rent. This benefits the start-up ecosystem as most start-ups primarily look for cost reductions, infrastructure and networking opportunities. A co-working space is likely to lead to cost savings in the range of 20–25% when compared with leasing a traditional office space.
A co-working space is usually an open floor-format office with shared spaces for meetings, networking and collaboration. Global research reports have stated that working in a co-working space has shown people’s productivity rise by 74% and motivation rise by 85%. Co-working spaces also offer startups, freelancers and professionals to not only increase their business network but be a part of a larger community.
NB: How has been the growth of co-working spaces in India?
Gokul: The potential market size for the co-working segment across India currently stands in the range of 12-16 million and includes start-up employees, professional freelancers, and staff at emerging businesses as well as large corporate office employees. Nearly 70% of the business opportunity for co-working space providers lies with large corporate firms seeking alternative, activity-based workplaces to nurture their talent and further their business growth. This demand is followed by the SMEs at 20% and professional freelancers and start-ups form the rest of the market demand.
The segment is estimated to have grown by 40-50% in 2017 and is likely to receive $400 million in investments by 2018, according to an industry study. There are approximately 300 shared workplace operators in the country at present, operating almost 720 centres across urban India.
NB: What is the occupancy rate of co-working spaces with multiple co-working spaces coming up across locations?
Gokul: India is the third largest startup hub and boasts of nearly 4 startups emerging every day with the total employee base of over a million people. This number is expected to be more than double by 2020. Apart from that, India’s freelancer workforce is in excess of 15 million professionals and growing. Together, these two factors present a potential demand for more than 3.5 to 4 million seats. As per available data, occupancy levels have been nearing 100% for most of the few premium co-working operators in India. Over 90% of India’s 300 shared workplace operators started in the last 12 months.
NB: What is the total space in million sq. ft. currently occupied by co-working space in India?
Gokul: As per reports, co-working space segment in India is expected to touch 10 million sq ft by 2020.
The leasing of co-working space went up about 2.4 times to 550,000 sq ft in Mumbai in 2017 from 160,000 sq ft in 2016, according to property data analytics firm CRE MATRIX. Across major cities, co-working/serviced office provider firms leased over 5.2 million sq ft since 2015. In 2017, absorption in co-working/serviced offices was 2.83 million sq. ft. about 186% higher than that of 1.52 million sq ft in 2016.
Bengaluru holds the maximum share of 42 per cent, followed by Mumbai at 20 per cent.
NB: Tell us about THE MOSAIC?
Gokul: We are niche players don’t foresee any direct competition. We believe that wellness has a direct impact on productivity. Taking from this, we have imbibed the concept of ‘Body-Mind-Soul’ in every aspect of the space, be it design & ambiance or the value added services. Apart from providing an ergonomically designed work space with a state-of-art fitness centre and other forms of fitness learning, we provide mentoring sessions to startups and also have an Android app / IOS app for members to collaborate internally.