There are no hard and fast rules about strict work hours or an official dress code here. You could be an entrepreneur, freelancer or a small startup, you do not need to work from home or a garage to avoid the high cost of renting which was impossible a few years ago.
You can still own your office and have flexible work hours at your own chilled out pace yet do serious work with others while sharing ideas, holding meetings and events, sharing a cup of coffee or gymming during spare time. It’s a successful and affordable workplace option – which is why even companies like Godrej, Paytm, HCL and Glaxo have gone for it.
A large number of such shared working spaces have already mushroomed in Gurgaon and Delhi. Noida too is fast becoming the next stop for budding entrepreneurs to cash in on the coworking culture. With close proximity to the capital, good metro connection and a young workforce, the NCR is seeing the emergence of coworking spaces.
With a core team of 10-20 people, renting an office space is never a feasible thought, says Girish Balachandran, managing partner at On Purpose Consulting, a startup creative communication consultancy. He feels coworking spaces take away worries of having to set up facilities for printing, coffee, service staff and wifi – in a way that the team can focus worek. “The sense of a level playing field with everyone seated in a similar way without cubicles can be democratising,” he says.
Also, with many offices and individuals working under a single roof, it helps in networking and meaningful conversations. “The less formal atmosphere is more welcoming for people looking to get away from traditional, corporate environments. The buzz of people, ideas and floating ‘bun aloos’ in Shahpur Jat can be quite thrilling and comforting at the same time. Also it’s great to see what others are doing, how fast the ‘gig economy’ is growing and the sense of small tribes co-existing,” says Balachandran.
Apart from networking, many co-working spaces offer mentorship through group events. Huddle, which is a 60-workstation, modern industrial co-working space in DLF Cyber City claims to offer incubation services to users. It recently partnered with Mumbai-based The Mosaic as part of a pan India expansion plan. The panel of mentors includes names like Bhaskar Pramanik, former chairman of Microsoft India; Gautham Mukkavilli, former India Beverage CEO of Pepsico and Saloni Nangia, president at Technopak. This support is being explored with coworking players in the country, institutions, private and public, to create a collaborative effort to grow and propel startups and entrepreneurs in India, claims Huddle. It has also partnered with Lovely Professional University where it identifies, solicits and selects students with innovative ideas and manages development of policies, and procedures.
Ishaan Khosla, Co-Founder and Partner, Huddle is of the opinion that every player in the coworking industry is focussing on constant engagement with their coworkers, through events, educational seminars and designing spaces that give a stimulating environment. “We realized the need of situating coworkers not only near but with their potential clientele and therefore created our first space in one of Cyber City’s most bustling buildings, with the largest corporate houses as our neighbors. Creating a differentiation is what enables a core base of coworkers. Each coworker has accessibility to get expert advice from a large base of mentors, who are former CXOs of large corporations, in addition to vetted partner support in legal, auditing, and other compliance services,” he says.
The major gain of the business is the environment for building businesses, says Sarthak Chhabra, director and co-Founder, AltF CoWorking. “With the growth of businesses around, it is an automatic growth for the company too. With more corporates and SMEs getting inclined to the industry, it helps with more stable businesses in comparison to dependency on startups and freelancers,” he adds.
Earlier people used to look for unfurnished offices. This trend has shifted towards well done up offices. “Further, the coming decade would again see a trend change from furnished offices to serviced offices, for which the major provider would be coworking spaces,” he says.
AltF CoWorking is India’s first private co-working space provider, which offers corporates, SMEs and startups private office spaces with flexible policies and customised services that include premium locations with connectivity, offices with natural light, layouts designed to support flexible team structure and competitive pricing ranging from Rs 8,000 to Rs 12,000 a seat depending on the location.
This trend has completely altered the demography of commercial realty. Many realters have jumped into the fray. Himanshu Bindal, CEO & founder of One Co.Work, says some of the builders have already started showing interest in this space by hiring the best talent from the CRE industry pool and backing them up by building world class infrastructure. “For instance, Cowrks, coworking space is backed by RMZ Group,” he says.
One Co.Work recently acquired a Mumbai based coworking space, IShare space with clients like HCL, Godrej, Siemens and GlaxoSmithKline, among others. It is planning to expand to Mumbai and other cities. Aiming to open 16 coworking centres across the country by the end of 2019, it hopes to introduce low cost and affordable shared space with acquistion. The current acquisition is in line with One Co.Work’s recent initiative – EcoSpaze – essentially an affordable office space for bootstrapped start ups who are low on resources but high on passion
Some three years ago when Bindal was looking for a suitable workspace for his sister he realised the need for good offices. This and his interest in the real estate sector made him think of setting up a coworking space.
Sudeep Singh, chief evangelist and CEO at GoWork, maintains builders prefer coworking spaces as a business model as it is currently the best way to use underutilised assets for them. “Going forward, players from the builder community will focus on establishing brands that allow their company to create successful ventures within the fast growing sector,” he says.
Another new entrant, Smartworks has an interesting take. Neetish Sarda, founder of Smartworks says it is interesting to understand how coworking has changed the way that commercial real estate is organised and to extrapolate what is next for the industry. The impact of the coworking model is felt mostly by large enterprises or companies that are looking at bulk spaces for their office.
“Coworking allows member companies to have greater flexibility in their space allowance strategies from an area and tenure perspective. Even if per seat costs are on the steeper side, the overall cost of managing a self-funded office remains lower as space usage is flexible. Additionally, common areas are shared between companies and are efficiently controlled using technology,” he explains.
He further adds that the lock-in period and capital investment is negligible vis-à-vis a traditional set-up. Property owners are opening-up to offer spaces and inventories to co-working companies on a lease or profit sharing or as customised solutions. Coworking companies are now competing with developers by offering large format spaces with differentiated service offerings, where coworking providers manage end-to-end facilities and services for all the member companies and create an experience that is larger than life. While this comes at a cost yet it is professionally managed and earns a healthy overall margin. Costs are lower as facilities like security, maintenance and provisions are shared, eliminating an additional ‘management fee.’
With flexible workspaces, companies can do away with massive capital outlays for leasehold improvements. The pre-furnished condition of the space makes sure that there are no hidden additional expenses. With long-term capital being invested in some of these co-working firms and companies embracing new models, there is little doubt that it is here to stay.
In the current scenario, says Singh, coworking spaces cover around 3.1 million square feet and this number is slated to grow 4 fold to about 13 million by 2020. Furthermore, 64 per cent of India’s workforce is projected to be below 35 years of age by 2020. Therefore, the need for flexible workspaces with top-notch amenities will be at an all-time high. Offering cost-effectiveness, flexibility, hassle-free maintenance, networking opportunities and a fun place to work, coworking spaces are set to be the way future Indian professionals work, he adds.
GoWork claims to be world’s largest co-collaborative co-working space sprawled over 8 lakh square feet with a capacity of 12,000 seats across its two offices in Gurgaon. As a part of its initial funding, GoWork raised an undisclosed sum of money from a family fund called Nimitaya Group, also a hospitality major. The campus has been built with an overall investment of Rs 800 crore. It is in talks with PE investors to raise $200 m.
Drawing inspiration from its investor, GoWork’s culture is driven by the ethics of hospitality, which is to solving problems of the workforce through unique solutions offered in an office space. Opting for a co-working campus cuts down the realty costs for the companies by 15-30 per cent for the companies. Talking about the market, the coworking phenomenon is driving the rentals high because of an increasing demand. As the co-working space providers are giving preference to prime locations, the rentals are expected to go higher.
Its current clientele includes companies like Zomato, Paytm, FlyingFur, Impactify, Lifelong, Fixoo, etc. GoWork has several packages for its members like Day Tripper (at Rs 350 per day), Tourist (at Rs 3,750 for ten days), Resident (at Rs 6,500 for a month), Citizen (an exclusive membership, at a price of Rs 8,250), Minister (one’s personal space at a price of Rs 10,000) and Virtual Office (at Rs 2,500).
From dedicated 1,000 seater collaborative work environs for quick and optimised teamwork to ‘meditation’ and’ frustration’ zones for those office blues, GoWork claims to ensures it gives significant focus to the individuals as well as their work.
Costs at a coworking space are a one-time fee. Whereas in conventional spaces, you need to look into the design, infrastructure, network setup, office staff, and not to forget any unforeseen maintenance costs! The cost of setting up is, for the most part, the deterrent for most interested parties, with security deposits and fit-out costs amounting to substantial numbers. At Cyber City in Gurgaon, Huddle is able to offer flexibility, infrastructure and additional benefits as compared to conventional spaces at a fraction of cost – starting at Rs 6,000 per month.
What data suggests
GoWork is in for a rapid growth. Globally, WeWork raised an additional $3 billion from existing investor SoftBank taking the group's valuation to $45 billion. Data from research firm Venture Intelligence shows that over $68 million has been raised by co-working spaces in the past three years with the sector recording two major acquisitions — IShare Space by One Co.Work and Daftar IIndia by AltF CoWorking.
Similarly a report by property consultants Knight Frank shares similar sentiments. It says, large companies now constitute about half of the overall client roster for flexible coworking facilities as collaborative workspaces are gaining wider acceptance in India. The company surveyed executives at 120 global companies which collectively employ in excess of 3.5 million people worldwide to come up with its (Y)OUR SPACE report. It tells that co-working works better in today's economic environment, where business planning horizons are shorter – coworking offers the freedom to expand and contract quickly according to market conditions. Dr Lee Elliott, global head of Occupier Research at Knight Frank noted that the research "underlines that a decade of global economic uncertainty has reshaped how many of the world's largest companies view workspace".
About 55 per cent of companies identified increased flexibility as the driver of this shift to coworking and 11 per cent said that the sense of community fostered among workers was the key while another 11 per cent stated that the greater speed to becoming operational was the primary reason for opting for coworking. Interestingly, about 75 per cent stated that personal productivity linked to wellbeing and happiness would increase as they shift towards a new flexible and collaborative model of occupancy.
Earlier in 2018, Knight Frank India had come up with a 'The office of the future' report, highlighting the traction co-working is witnessing in India. There are about 200 coworking players running an estimated400 shared workspaces across the country. Globally, the demand for flexible workspaces is set to accelerate as over two-thirds of global companies plan to increase their use of flexible coworking and collaborative space over the next three years. The research shows global corporates intend to operate increasingly from flexible, serviced and co-working spaces, which create a more collaborative working environment and offer freedom to expand and contract quickly according to market conditions.
Coworking spaces sell themselves based on their design that facilitates privacy and yet allows coworkers to have some interactions through common gyms and cafes. Some even boast of nap niches and jacuzzis and most of them help host startup events.
As Bindal points out, coworking was often seen as the space for freelancers and early ventures to work. This is no longer the case. “Not just the early starters, even the big establishments and traditional corporates are also shifting to the coworking space. The coworking spaces are managed by in-house teams facilitating the clients to start immediately. This saves a lot of time and cost,” he says.
However, there are challenges. Major challenges include the huge capital cost needed to start each centre and the amount of time it takes to build a coworking space from scratch. It hampers the growth of the company, which is bootstrapped and growing without raising any funds, Chhabra explains.
Bindal feels due to the economic downturn, clients may often face revenue problems and hence may not be able to sufficiently pay monthly rentals. It is seen that many startups shut down soon after their inception due to miscellaneous reasons. This affects the coworking space too.
For Singh the major challenge is to establish client loyalty. With best in class amenities and services being offered by most of the leading players, ensuring user allegiance and stability becomes top priority for coworking spaces. Top coworking spaces are thus introducing high-end facilities such as cafes, gyms, spas, food courts, gaming zones and productivity enhancing ‘breakout zones’ in order to attract more users to their spaces.
For some users the big challenges are meeting rooms required for one-to-one conversations with team members. These are few in number as smaller groups jam together on ideas while others waiting outside fume. Toilets too are few and therefore usually full.
Key to success
The key to success Sarda maintains is that the flexible workspace segment has been on an upsurge in the last few years. The upswing in the growth is being driven primarily by technology, enterprise and the banking sector. Smartworks has also witnessed a huge demand for workspaces in cities like Pune, Hyderabad and Kolkata in addition to metros like Bangalore, Mumbai and Delhi NCR. “We have a footprint of more than 3 lakh square ft in Bangalore alone, 1.25 lakh square ft in Pune and almost one lakh square ft in Hyderabad,” he says.
Coworking spaces are designing programmes to make member employees more engaged and productive by way of introducing activities to make them feel comfortable in the diverse work environment. Some activities such as chair yoga, indoor games and contests, breakout sessions, pet therapy, stand-up comics, concierge services, networking sessions, inter team competitions, matches, creche facility, day care centres, incubation programs, art workshops help to develop bonding.
Smartworks claims to have seen stupendous growth with the overall revenue increasing 5X in the last year. “While it has been rewarding to grow so rapidly, we are conscious of our bottomline. We have always focused on driving efficiencies. Our business model is already profitable,” says Sarda.