Firms in co-working space expanding to tier 1 & 2 cities

3/22/2022 12:01:00 PM

Co-working operators are expandinginto tier-1 and tier-2 cities, driven bythe adoption of the hub-and-spoke model by organisations, reverse migration of employees to their hometowns, affordable office rental costs, a growing startup ecosystem and the availability of talent, said industry executives. Large companies are now asking for multi-city space from co-working companies. "We have closed multi-city deals with our existing large enterprise clients in IT/ITeS, BFSI (banking, financial services and insurance), especially in markets like Pune, Noida, Hyderabad, and Bengaluru," said Harsh Binani, co-founder, Smartworks. In the past six months, demand for tech-enabled managed workspaces has grown threefold, according to industry experts. “With Covid-19 subsiding, we have been observing a substantial increase in the number of queries for our office as an outsourced service. Corporates are determined to lease and divest their office spaces to avoid unwanted longterm commitments and capital expenditures, "said Ankit Jain, director, Skootr. The company plans rapid expansion in Bengaluru, Mumbai, Pune and Noida in 2022 to cater to the growing demand for offices. Corporate occupiers are looking for portfolio re-optimisation and focusing on the concept of managed office spaces. “We have sold 6x more seats in the last three months than what we used to sell pre-Covid, with a huge chunk under our demand-led supply model for mid-to-large-sized corporates across tier-1 and 2 cities. We are working towards further expanding our base pan-India with 200 centres by the end of 2022,” said Amit Ramani, Founder & CEO, Awfis. Half of a large co-working operator’s demand now comes from large occupiers who want satellite offices under the hub-and-spoke model. “For all practical reasons, co-working spaces are the most preferred option for companies to satisfy this demand,” said Nikhil Madan, co-founder, The Office Pass. According to international property consultant Savills India, about 23% of the leasing in the first two months was for flex and serviced offices. “The first two months of the year have been where we are seeing a shift toward flexible and serviced office solutions. Also, tech demand is likely to pick up with a very strong return to office sentiment,” said Shweta Sawhney, managing director, Delhi-NCR, Savills India. Source: The Economic Times