Sanjeev Thakur
After the pandemic, the co-working industry in India experienced a sharp increase in business. The coworking market in India provides a viable response to the urgent occupier needs and requirements at a time when businesses are attempting to find a balance between productivity and cost containment.
The addition of extra office space for businesses was perceived as an effort to give recruits the option of being nearer to their home areas in the wake of people returning to their hometowns as a result of the COVID-19 outbreak. Companies looked for additional facilities to entice new employees in response to increased turnover and staff costs.
For the real estate sector, the previous year served as a baseline. In Q3, there was a sharp increase in the volume of transactions closing, and this trend is predicted to last until at least 2023.
Industry estimates indicate that 80–90% of pre–COVID–19 levels of demand have already been met for coworking spaces.
Coworking space demand is so great that the occupancy rates are still at best 35%, with larger businesses still waiting it out.
Future Forecasts of Coworking Spaces
The present growth rate of the coworking industry within commercial real estate is 3 percent, in the next 5–7 years it is expected to grow to 18 to 26 percent. Resurgent office real estate demand, driven by the nation’s information technology (IT) services and business process management (BPM) sector, is already indicative of this expansion. The BPM sector contributed 40% of the expansion.
By 2025, analysts project that shared workspace will occupy 30% of all office space. More offices and companies are switching back to traditional workspaces, or at the very least, they have embraced a hybrid work paradigm. Large Indian IT companies like Infosys and TCS have plans to expand their offices and workforces. The expansions were anticipated to be finished by the third quarter.
Through the course of the year, the demand for real estate from IT services has climbed considerably. Data from Savills shows that IT companies added 18.2 million square feet of new office space last year; this year, that number increased by 17% to 21.3 million square feet. Other industries experienced higher growth even though they took up less overall space than IT services. For instance, the net real estate demand for “flexible workspaces,” which include coworking companies like WeWork India, increased by almost 64% from 4.7 million square feet in 2021 to 7.7 million this year.
Read More: Why Are Flexible Workspaces Trending In India?
Key Trends Shaping the Future of Coworking Spaces
Key Trends Shaping the Future of Coworking Spaces
1. The Emergence of Niche Segments
2. The Supply Chain Will Grow
3. The Trend of Large Corporations Moving into Coworking Spaces Will Continue
4. Development of a Community and Well-Being
5. Continuous Automation
1. The Emergence of Niche Segments
Numerous specialty industries, such as women-only coworking or student coworking, will develop inside the coworking environment. This has been observed globally, and the Indian market will continue to document these changing tendencies in the future. The co-working players will expand into these areas as the culture of workstations grows in hill stations, rural backyards, picturesque countryside, etc.
2. The Supply Chain Will Grow
Co-working is growing in popularity as a successful industry. More landlords will enter the market as a result, offering their properties for coworking uses. Notably, many facilities that are having trouble attracting tenants can be converted into co-working spaces to create sustainable revenue streams.
3. The Trend of Large Corporations Moving into Coworking Spaces Will Continue
The upward trend will persist in 2023, and many larger businesses will choose to lease a number of managed office spaces from the city rather than a single centralized office space. Additionally, this will enable their staff to take advantage of flexible scheduling and reduce travel time.
4. Development of a Community and Well-Being
Operators of coworking spaces will take more initiative to promote employee and community welfare. To bring people who have similar interests together and provide them with adequate room to create, network, and engage with one another, a variety of events and engagement activities will be held on the property. Similarly, entertainment events including concerts, musical performances, product demonstrations, rock bands, etc. will be held to support the workers’ overall health and help them to remain energized and effective.
5. Continuous Automation
Coworking operators will invest in various technologies, including 5G internet, gadgets, and greater security access, among others. To provide greater convenience to consumers, they will also invest in various cutting-edge job management software, digital payment systems, etc.
Read More: Why Switching to Coworking Spaces Are Right Fit for Your Business?
The total coworking leasing in 2022 was about 20% of the total leasing. There has been a noticeable increase from 2019 when the segment made up 14% of office leasing in India. In 2023, the market will continue to grow as a result of organizations’ efforts to strike the proper balance between employee motivation, productivity, and collaboration as well as total pricing optimization.
Operators of co-working spaces will continue to incorporate new automation, control systems, and technology that can aid in boosting productivity and efficiency and overall demand for coworking in general.