Sanjeev Thakur
In India, coworking spaces are becoming more and more popular among companies; demand has doubled over the last four years. The rise of coworking spaces in India was mainly following the COVID-19 outbreak, the real estate market underwent a favorable major shift that brought on increasing investment activity and demand for coworking spaces.
Many believe that there is a significant unmet need for co-working spaces in India, given that our country, now, is the world’s third-largest startup hotspot and home to the second-largest workforce of freelancers. The market is enormous and growing. Millennials are already making up 46% of India’s labor market, and they are yearning for tech-savvy workplaces. They welcome possibilities for teamwork, providing a platform and opening doors for coworking aggregators like Stylework to grow.
And coworking spaces aren’t just important for entrepreneurs, small business owners, and freelancers; large corporations are starting to use them as well. The demand for managed office spaces has increased as a result of the acceptance of the hybrid work style. Businesses are now seeking adaptable locations, creating new business prospects in the sector.
Traditional office spaces are now being replaced by more affordable and practical coworking facilities. The market for coworking aggregator platforms is rising, and there is a growing demand for coworking spaces in both big and small cities. In this article, we will examine the trends and statistics underlying the expansion of coworking spaces in India.
Coworking – the Workspace of the Future
Due to the accessible infrastructure and commercial opportunities in the post-pandemic environment, an increasing number of companies in India have chosen to relocate their operations to flexible workplaces, indicating a growing preference for traditional office facilities.
Numerous businesses are adding flex space to their portfolios, which is causing the flex market in India to grow. In fact, consulting, IT-BPM, and e-commerce firms that are opening several satellite offices in suburban areas of the metro cities will be the main drivers of the need for flexible workspaces. By 2023, the amount of flexible workspaces will have surpassed 60 million square feet in both metro and non-metro locations.
Companies are choosing to relocate into co-working spaces more frequently because they provide flexibility and a conducive environment for enhancing work-life balance, employee productivity, and talent acquisition and retention.
We already see corporations increasing their co-working footprint as a result of these important and real business benefits, and in the upcoming years, we only expect this trend to continue to develop.
For the purpose of luring young people, traditional industries like banking, insurance, manufacturing, etc. are also transitioning to co-working spaces. Co-working spaces provide a simple method of renting an office space and billing by the number of filled seats, allowing us to save a sizable sum on rent.
Additionally, since these are already included, we are spared the inconveniences of setting up basic additional amenities like internet, phone communication, conference rooms, etc.
Coworking spaces are becoming more popular all around the world as businesses adjust to changing economic and social conditions. The need for many firms to prefer coworking spaces over conventional office leases has increased in the post-pandemic environment.
According to Business Today, the demand for coworking spaces has nearly doubled in India over the previous four years.
Also Read: India on a Rise in the Global Flex-Office Markets
What Does the Statistics Say?
Co-working space demand is now eighty percent over pre-COVID-19 levels, according to estimates from the industry. From 2021 to 2026, the coworking market in India is predicted to expand at a CAGR of 16%. This expansion might be linked to the increase in startups and the rising need for flexible workspace alternatives. India is the third-largest startup ecosystem in the world, and this has significantly increased demand for coworking spaces.
The majority of coworking space demand in India is accounted for by the IT and technology sectors, which utilize around 40% of all available coworking spaces. This is a result of the necessity for flexible workspace solutions and the dynamic nature of these sectors. Coworking spaces have also been more popular in recent years among other sectors, including e-commerce, healthcare, and logistics.
Also Read: Benefits of Flexible Coworking Spaces for Modern Businesses
City-Wise Prediction
- Two-thirds of net coworking space was consumed in Bengaluru and the National Capital Region (NCR) in the first quarter of 2023, while Pune and Chennai only absorbed about 0.52 million square feet.
- The net absorption of coworking spaces in the top seven business cities in India increased by 90% between Q1 2019 and Q1 2023, from 1.3 million square feet to almost 2.18 million.
- The first quarter of 2023 witnessed a net office absorption of over 4.6 million square feet in the southern cities of Bengaluru, Hyderabad, and Chennai, with coworking companies accounting for 26% of this.
- Western markets Net office space absorption in the Mumbai Metropolitan Region and Pune was about 1.48 million square feet, with coworking companies accounting for 24% of it.
Global collaborative workspace provider Stylework’s expansion in response to increased demand for the coworking sector
A leader in the business and residential real estate sectors is tech-based coworking space aggregators like Stylework. We anticipate a 10X growth across all our verticals by 2025.
By the end of the next year, global collaborative workspace provider like Stylework wants to take off and prosper through the global development of its services across the Middle East, Africa, APAC, Europe, and the Americas, as well as by spreading its wings to more than 3600+ office spaces distributed across 160+ locations in India through its affordable coworking space services.
We approach our services in a creative and customer-focused manner through our coworking management software. We make use of our expertise to provide a scalable and sustainable work environment, which ultimately improves organizational performance.
Coworking is expected to increase from $7.97 billion in 2020 to $13.03 billion in 2025, according to the Coworking Space Global Market Size Report. By the end of 2023, we intend to expand to more than 3600 new locations spread over 160 Indian cities. Services are being expanded globally in the Middle East, Africa, Europe, APAC, and America.
Demand for co-working office spaces has never been higher. Compared to 45–60% a year ago, coworking space occupancy rates have recently rocketed to 90–100%.
Also Read: Coworking Spaces’ Influence on the Indian Real Estate Market
The Bottom line
Following the epidemic, a lot of businesses, especially those in the IT and ITeS industries, are choosing flexible workspaces over conventional offices. Managed office spaces are appealing because of their variety of settings, including residential communities, shopping centers, and hotels, as well as because they are more affordable than traditional offices with extended lock-in periods.
The three business cities in India with the most co-working spaces at the moment are Bengaluru, Delhi, and Mumbai. But the industry has also spread to Tier 2 cities like Chandigarh, Ahmedabad, Kochi, Indore, and Jaipur, which are also home to these upscale spaces.
The growth of managed office spaces in India shows that there is plenty of opportunity for businesses to adapt to the evolving nature of work in 2023.
Coworking spaces are becoming increasingly popular, especially in the technology sector where the fragmented employment landscape has made coworking facilities a desirable choice for companies.
In conclusion, the growth of the startup sector and the rising need for flexible office space solutions are driving the rise of coworking spaces in India.
This expansion is being fueled by coworking aggregator platforms, the IT and technology sectors, as well as other areas including e-commerce, healthcare, and logistics.
Coworking spaces are an appealing alternative for organizations of all sizes in both large and small locations across India because they provide networking possibilities, collaboration opportunities, cost savings, and most importantly flexibility.