Even as the demand for flexible workspace in key metros remains subdued, co-working space providers are witnessing a surge in demand from tier-2 cities and towns as a growing number of organisations are exploring a hub-and-spoke model to enable employees to work from locations closer to homes.
“Flexible workspace demand in suburban cities is on the rise with many choosing to live and work outside metros. With demand dropping in the Central Business Districts (CBDs), we saw a lot of demand pick up in tier-2 cities like Chandigarh in the north to Coimbatore in the south,” said Harsh Lambah, Country Manager India, VP Sales – South Asia at IWG Plc.
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IWG Plc, one of the world’s largest shared office providers with presence in over 3,300 locations in 100 cities, currently operates with ‘Spaces’ and ‘Regus’ brands in India.
“Today we are the only global player with workspaces in tier-2 cities like Vizag, Coimbatore, Ahmedabad, Lucknow, Chandigarh, Jaipur, etc. We want to expand into more tier-2 cities like Panipat or Cochin,” Lambah added.
Amit Ramani, Founder & CEO of India’s largest homegrown co-working service provider Awfis, said demand from tier-2 markets like Ahmedabad, Chandigarh and Indore are rapidly growing as people who migrated back to their hometowns are looking out for professional workspace in their places.
“Owing to the current remote working situation, many employees are operating from their hometowns in tier-2 and -3 cities. Organisations are evaluating a distributed workspace model/hub-and-spoke model that allows employees to work near home or work from anywhere out of a professionally managed work setup,” Ramani said.
In a recent report titled ‘The Future is Flex’, property advisory CBRE South Asia projected India’s flexible office stock to grow by 10-15 per cent year-on-year over the next three years as companies are increasingly receptive to hybrid workspace models.
The report noted fluidity of the workforce, hub-and-spoke models with satellite offices to reduce employee commute time, location agnosticism through work from anywhere (WFA) policies as the future growth drivers for the flexible space industry.
“Cautious expansion by operators in tier-1 and tier-2 cities in the medium run is expected to go a long way for the flex industry,” CBRE noted.
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Awfis is aiming to double its footprint from 2.5-5 million sq ft by expanding from 75 centres currently to 150 centres in 2021 and by growing from 40,000 seats to 80,000 seats in 2021.
“We will continue to expand our business in the existing markets of Delhi NCR, Mumbai, Pune, Bangalore, Hyderabad, Kolkata, Chennai,” Ramani said, adding, “We also plan to venture into new markets like Jaipur, Kochi and Lucknow given the growing demand of shared workspaces across India.”
IWG Plc’s Lambah said the company is planning to bring a third brand ‘HQ’ at the right opportunity and the brand will be ideal for the company’s expansion in tier-2 cities like Cochin, Trivandrum, among others.