The startup eco-sphere has been continuously growing in all major cities in India and despite the occasional hiatus, the various global giants in the office space industry have notably shown considerable interest in the coworking segment. A large number of startups now hope to reduce the operating costs of owning or renting exclusive office space. This reduction in operating expenses allows startups to invest more funds in core business, such as increasing production or retaining talented employees by offering them the highest pay packages desirable. Coworking spaces have become very popular due to the pay-per-use model with reasonable and defined rates for the set of services offered.

Also, these shared office spaces have certain unique amenities like a food court, babysitting services, play areas, spa, gym, sleeping pods, etc. All of these added conveniences have made these offices even more popular. All of these amenities boost staff morale in a very positive way, which eventually improves productivity. The presence of childcare provided by trained staff also brings great relief to working couples who can focus well on their work without compromising their parenting responsibilities. The office spaces also have a great atmosphere with great aesthetics and interior design. These factors create a relaxed and orderly atmosphere in these office spaces that alleviate work stress that professionals often experience.

Trends in coworking spaces expected in 2018

These shared office spaces offer great cost savings, which is also combined with the ability to network with other entrepreneurs operating from the same workspace to achieve certain common goals. Therefore, these shared offices are certainly here to stay and evolve in 2018. Regardless of the high potential that these shared office spaces have, there are also certain factors that can be obstacles in their rapid expansion. These factors include the following:

• Stakeholder orthodox attitude – Few owners have failed to fully understand the concept of coworking and are often wary of leasing real estate assets to coworking operators. Due to the lack of proper knowledge, they feel that it is safer to rent their properties to traditional companies. Furthermore, India has been seen to have certain flaws in the legal system, which prove to be a deterrent for space coworking operators to opt for court battles against landlords.

• Exclusivity agreements: according to the exclusivity agreement, only a collaborating operator can stay in a specific building. This leads to a suboptimal use of space. Therefore, a limitation is exerted on the growth potential of the collaborative space industry.

Despite the above hurdles prevailing today, industry experts predict that the future of coworking will be very bright after witnessing the increase in demand for coworking offices.

Expectations for future growth of coworking offices

Cooperative operating companies are the most popular startups in India as they are receiving millions of investments from major investors. Work culture is gradually evolving with the increasing adoption of coworking spaces. Currently, there is an average occupancy of 85% of the coworking spaces available in India. This has shown that a minimum of 20-25% of operating costs can be saved by adopting coworking spaces. Sometimes it is even higher depending on the nature of your business.

Experts say that coworking is going to be a dominant trend in India and the truth is that it is not just a fleeting style that is likely to fade like red mullets and flared jeans. Based on observations, various experts predict that India offers fertile ground for the immense growth of coworking spaces. The reasons for the high demands of coworking spaces are the booming ecosystem of startups and the huge list of flexibility attached to coworking spaces.

There are already large investments in
India has witnessed the demand for coworking spaces not only from startups and freelancers, but also from major conglomerates and business corporations. The expected funding in co-working space provider companies is expected to be $ 400 million in 2018. It is expected that 70% of the business opportunity will come from large corporations.

Crucial statistics related to the Indian coworking phenomenon

Delhi, Mumbai and Bangalore are the cities that are already experiencing rapid growth when it comes to the demand for coworking spaces. The expectation is that there will be around 400 shared offices across India by the end of 2020.

In 2018, industry experts predict an increase in exclusivity agreements. This would mean that there would only be one coworking space in a single building. This is showing that it temporarily dampens the coworking operator market and also leads to suboptimal use of amenities and space. There are big players like Cox & Kings, Sequoia and Paytm that have already invested in the coworking space market and therefore may face a temporary setback in 2018.

Industry insiders are predicting that coworking spaces would soon end lease-based models that have certain restrictions attached to them. They are likely to implement a unique ownership model that offers even more flexibility at an even lower price. The demand for coworking spaces is skyrocketing today and this is a sign that the future growth of coworking spaces is obviously at stake.

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