Bangalore: For Anita Sidhwani, HR Head at Cleo, a cloud integration software company, work is relaxing. After over a decade of working in SEZs, with their tedious security procedures, Sidhwani feels a sense of freedom as she logs into the plug-and-work coworking space at IndiQube. She's been here for six months.
“After dealing with Bengaluru's traffic and the same security process every day by the same security guard, appears stressful now. If you forget your identity card, the guard who sees you every day will still make calls and make you wait. I am happily away from the queues of cabs waiting for security check drill at offices in the extreme ends of the city,” says Sidhwani. For her and other employees at Cleo, working in a vibrant, open office is a big motivation.
When Gopalakrishnan P, co-founder of a small startup Concerto AI, that makes software for conversational devices, was looking for a place last year so the team could start working, it just took a call 15 days ahead, to get everything in place in a coworking space. “The best part about coworking spaces is that I can hire more people without the worry of space expansion. Also, the speed with which you can set up and start getting productive, is to be appreciated. Everything else is pay as you go, and one doesn’t need to own any infrastructure any more. It's a great work model,” said Gopalakrishnan, who is also located at IndiQube.
Coworking spaces are being compared to cloud computing, that takes away issues that come with owning or renting infrastructure. Many coworking space providers are mushrooming in India, like WeWork, Coworking Hub, BHIVE, 91Springboard, among others.
While some companies provide space per day or per desk, there are also brands that design space as per need and number of people. While housekeeping, electricity, fast internet and tea/coffee are the basics expected from coworking spaces, some have gone beyond to provide breakout spaces, place for X-Box, swings, free unlimited coffee or even a glass of beer. Colourful furniture and vibrant, well-decorated walls are the trend.
Juggy Marwaha, former India Lead of WeWork, in the report The Coworking Revolution by JLL India, mentioned, “The future of this industry will redefine the term ‘coworking’. The trend is moving towards creating beautiful, well-designed and functional spaces that encourage collaboration and create a sense of community. There will be a paradigm shift in the way companies operate in future, and some of the best innovations will be an outcome of such community collaboration.”
It's not just startups, expanding companies are also looking at coworking spaces for better services, like Levis, Red Bus, Bluestone, Scripbox, Fresh Menu, No Broker, Rubrik, Thoughtspot, Fungible etc, who are at IndiQube.
Payment basis could differ -- while some brands charge per square foot, others charge for number of seats, mostly on monthly basis. The hubs also provide packages on the number of times small teams can use conference rooms or cafeterias.
IndiQube recently raised Rs 100 crore in equity in a round led by WestBridge Capital. With 25 hubs in India covering over 1.4 million sqft of workspace, they plan to go up to 2.5 million sqft, which means over 20,000 seats in the country. Already in Bengaluru and Pune, they plan to expand to Mumbai, Chennai and Hyderabad.
According to Rishi Das, co-founder, IndiQube, “While the demand for office spaces is not increasing much, the need for managed office spaces is growing fast. It’s not real estate but a service-based industry.”
India's workspace provider market holds only 1%-2% share of the commercial real estate market, but is now developing with more people shifting to it for cost benefit. “In the coming years, this market will develop more in the six major cities, and not much in tier-2 or tier-3 cities,” said Ravindra M K, adviser, BHIVE Workspace. "Using an outsourced space saves 20%-30% of cost, provides flexibility on working at multiple locations on chosen days, and the focus of the company remains on business as the rest is managed."
It is anticipated that by 2020, demand for coworking space is set to outgrow that of traditional office space. “There was a 22% rise in overall leasing activity in Q1 2018, as against the corresponding quarter last year. This indicates that while coworking space may have its own demand, conventional spaces are here to stay too. But, of all the major challenges in the Indian context, most coworking firms are struggling to identify the perfect business model – sub-lease, ownership or JVs. In fact, many firms had to shut shop because they were unable to get the same returns on their investment as prevailing market rates,” said Anuj Puri, chairman, Anarock Property Consultants.