How is the Flexible Workspace market Positioned in India?
Changing business strategies, influx of foreign companies, growing gig economy, increasing number of start-ups and rising real estate cost has lead to the development of flexible workspace industry in India. The growing Gen Z, value their work-life balance more than ever. They want a workspace that can help them maintain this balance. Tech enabled co-working spaces provide them with exactly that, accompanied by flexibility and collaboration. Grade A amenities at affordable prices have attracted SMEs, startups and freelancers alike to occupy flexible offices.
The Flexible Workspace industry has been observed at a growth stage. The supply has drastically increased from ~ sq ft in 2016 to ~ sq ft in 2019. This is owing to , India’s thriving economy, its conducive nature towards networking, increase in the number of domestic operators, entry of WeWork, expansion in tier 2 and tier 3 cities, growing millennial population, increase in funding and market consolidation.
By Type of Flexible Workspace: The flexible workspace industry has evolved drastically from a pure co-working space to emergence of serviced and hybrid spaces in the last 4 years. Serviced offices accounted the maximum share of ~% of the overall supply in 2019. More and more flexible workspace operators are shifting towards providing customized managed offices to MSME’s and large enterprises.
By City: Bangalore contributed majority share in flexible workspace supply in India followed by Delhi NCR, Mumbai, Hyderabad and Pune. The penetration rate of flexible workspaces in the overall office supply is highest in Delhi NCR and Bangalore. Due to high real estate cost the average desk cost was found to be highest in Mumbai. The average center size of flexible workspaces is drastically increasing in tier 1 cities, for instance, Smartworks inked the largest Coworking deal of 0.5 million sq ft in Pune. Operators are expanding in other tier 1 and tier 2 cities such as Chennai, Ahmedabad, Jaipur, Kochi, Indore and Bhubaneswar, Chandigarh and Kolkata.
How has the Demand Changed in India Flexible Workspace Market?
The demand has been growing at a rapid rate. The total occupied flexible workspace has increased from ~ sq ft in 2016 to ~ sq ft in 2019 and the average occupancy rate has increased from ~% in 2016 to ~% in 2019.
By End User Type: Enterprises accounted the highest share in the overall demand of flexible workspace in India followed by MSME’s/Start-Ups and Entrepreneurs/Freelancers. The demand is driven by the fact that more and more Corporate & SME’s are now realizing the multiple benefits a shared workspace has to offer in terms of speed, flexibility and plug & play solutions that allows them to focus on their core business without getting into the stress of managing real estate. Large enterprise are opting for serviced spaces to avoid the hassles of long term leasing and managing office spaces, which incurs heavy costs.
Supply-Demand Gap Analysis in India Flexible Workspace Market
The supply-demand gap was increasing between 2016-2018 as operators such as WeWork, Smartworks, Awfis, 91Springboard and others were on an expansion spree which created a situation of oversupply. The Supply-Demand Gap is expected to reduce as occupancy is expected to increase to around ~% by 2025 and therefore demand is expected to grow at a much faster pace in comparison to supply. The supply-demand gap started reducing from 2019 as post 2019 the operators started to expand in tier 2 and tier 3 cities and their focus for tier 1 city was to increase occupancy by providing customized services and tech enhanced solutions.
Competitive Scenario IN India Flexible Workspace Market
The market is a fragmented with presence of more than 300 flexible workspace operators. The industry is highly competitive and flexible workspace operators are continually trying to provide unique solutions. The operators are evolving their offering in order to cater to evolving needs. The flexible workspace operators are changing their business model from lease model to joint venture model, management model and franchise model. Operators are also experimenting with the location of co-working centers and are moving towards unconventional locations such as metro stations, malls, cafes and others.
What Is The Future Outlook And Projections For India Flexible Workspace Market?
The India Flexible Workspace Market has been anticipated to grow with a CAGR of ~% in terms of supply and ~% in terms of demand during 2019-2025F. This is owing to multitude of factors namely emerging domestic and foreign operators, increasing number of using flexible workspaces, government initiatives to boosts start-ups, development of co-working spaces outside office building, increasing rents of commercial office and expansion in peripheral regions and tier 2 cities. With development of IT corridors and increase in number of large scale spaces, the flexible workspace stock is expected to grow at faster pace in Pune and Hyderabad.
Key Segments Covered:-
By Type of Flexible Workspace
Serviced Spaces
Hybrid Spaces
Co-Working Spaces
By City
Bangalore
Delhi NCR
Mumbai
Pune
Hyderabad
By End Users
Enterprises
MSME’s/Start Ups
Entrepreneurs/Freelancers
Key Target Audience:-
Flexible Workspace Operators
Office Brokers/Aggregators
Commercial Real Estate Companies
Venture Capitalist and PE Firms
Real Estate Consultant
Office Furniture Providers
ICT Providers
Time Period Captured in the Report:-
Historical Period – 2016-2019
Forecast Period – 2019-2025F
Companies Covered in the Report:-
Flexible Workspace Operators
Regus
WeWork
Awfis Space Solutions
IndiQube
Smartworks
91Springboard
The Executive Centre
Innov8
Vatika Business Centre & Co-working Spaces
InstaOffice
For More Information, refer to below link:-
India Flexible Workspace Market
Related Reports:-
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
