Co-working share in Indian office real estate at 27% in Q1 2023: Anarock
NEW DELHI: Demand for flexible office spaces has hit a new high after the pandemic, with major companies and businesses including start-ups now increasingly opting for co-working spaces.
Out of a net absorption of approximately 8.2 million sq ft across the top seven cities in Q1 2023, co-working spaces had a 27% share, according to recent data shared by Anarock. In Q1 2019, its share was just 14% of a net office absorption of approximately 9.3 million sq ft.
Among the top seven cities, Bengaluru and National Capital Region (NCR) together accounted for 66% (about 1.43 million sq ft) of net co-working absorption in Q1 2023.
Pune and Chennai together saw approximately 0.52 million sq ft of co-working spaces absorbed in the same period. Kolkata saw a mere 0.25 million sq ft office space absorbed in Q1 2023, of which 12% (approx. 0.03 million sq ft) was by co-working players.
In terms of overall growth in co-working demand, the top seven cities witnessed a 90% growth in net absorption in this period – from 1.3 million sq ft in Q1 2019 to approximately 2.18 million sq ft in Q1 2023.
Besides start-ups and other businesses, many IT/ITeS companies also prefer flexible spaces over regular office spaces today, with a strong emphasis on workspace flexibility for employees.
Utkarsh Kawatra, senior director – myHQ (ANAROCK Group), said, “What works very well for co-working now is the fact that such spaces are not concentrated in the city centres, like regular office spaces tend to be. Rather, they’re mushrooming across different locations, including residential hubs. Co-working spaces now even operate out of malls and hotels, and many large office parks also have co-working quadrants. This helps companies to remain closer to their employees and thus offer them flexibility.”
Flexible office spaces allow firms to deploy instantly rather than having to contend with office layouts and fit-outs, at costs comparable to regular office spaces which also involve long lock-in periods. Co-working spaces are shooting up in major cities with low Grade A offices vacancy levels and a higher demand from start-ups, freelancers and corporate looking to expand.
Many companies continue to follow a hybrid working culture, which involves setting up smaller satellite offices or remote teams using neighbourhood on-demand co-working spaces. All these use cases bode well for the co-working industry.