The inception of the co-working industry has enabled young entrepreneurs and start-ups to not be restricted by the lack of space or proper infrastructure and move closer towards their real goals. With an increasing number of people finding value in this proposition, the co-working sector is no longer in the back burner but at the forefront of commercial real estate in the country.
Flexible co-working spaces are not solely driven by start-ups, millennials and small and medium-sized enterprises anymore. It is also not limited to a specific kind of audience – there is a growing trend of big corporations also adopting co-working spaces in the recent past. Companies such as RBL, PayTM, Swiggy, Vice Media, Pepsico and OLX have already begun to move away from conventional spaces to co-working spaces.
During its early days, the industry started offering co-working spaces with the concept of short periods of stays. In a relatively short amount of time, the co-working industry has gone from a part-time, small-scale venture, to a global worldwide phenomenon. Today, we are nearing two million co-workers, working from thousands of spaces all over the globe.
Co-working spaces are also increasingly becoming industry agnostic and are seeing impressive growth. This has been possible due to the adoption of innovations and hybrid product & service offerings provided by the co-working operators. Co-working spaces are rapidly evolving themselves, keeping in mind the needs of their varied audience and adapting the space according to the needs of their corporate clientele. This includes providing a mix of private offices, fixed seats and even customising the entire centre specifically according to the client requirement. The spaces provide multiple options for customised spaces to established firms, start-up employees, freelancers, and emerging businesses.
Corporations working out of co-working spaces have witnessed lower operational costs and hassle-free operations. Currently, India’s workforce is dominated by the millennials who prefer a work culture that promotes community engagement, collaborative spirit, flexibility, and individuality – all aspects that co-working companies provide.
According to a recent report by JLL ‘Reshaping Indian Workplaces’, steady demand from corporates, start-ups, and entrepreneurs have resulted in a huge jump in the coworking share in total office leasing which increased from 5 percent in 2017 to 8 percent in 2018. In Q1 - 2019, it further increased to 12 percent. Factors such as technological innovation, digital transformation have further fuelled the trend of corporate companies joining the co-working space.
Another trend that’s emerging is the growing popularity of managed offices which are customised for each occupier to meet all their requirements which includes workspace planning, flexibility, managing cafeterias etc. The prospects of the co-working industry look bright with drivers fuelling the demand for high-quality workspace with amenities.
In spite of the growing popularity, like every industry, this too has certain challenges to overcome. Data security and privacy issues are one of the top concerns by companies opting for co-working spaces. For a company dealing with high volumes of confidential data, sharing space with external organisations can be potentially challenging. However, effective policy frameworks, ensuring soundproof rooms, and other procedures can help mitigate those risks.
Nevertheless, the industry is seeing a rise in investments and is likely to attract USD 1 billion in investment during the financial year 2019-2020, according to the report ‘Reshaping Indian Workplaces’ by JLL. Currently, about 10 percent of the offices in India are occupied by the co-working sector, which is approximately third-largest after IT/ ITES and manufacturing sectors. Millennials are also serving as key factors for the opportunities for co-working companies in India as they demand agile workforces and vibrant surroundings.
In conclusion, co-working spaces have now moved beyond their initial role and are no longer limited in their reach, scope and impact. Today, they are increasingly acting as business enablers for India’s corporate community. It will be interesting to see the evolution of co-working spaces in the future, and the impact it will create on various businesses.