The startup eco-sphere has been continuously growing across all major cities in India and since the incidental lull, the various global giants in the office space industry have noticeably shown a significant amount of interest in the co-working segment. A large number of startups are now looking forward to cutting down on the operational costs of owning or renting exclusive office spaces. This cut down on the operational expenses is enabling the startups to invest more funds in the core business like increasing the production or retaining the talented employees by offering them the desirable higher pay packages. The co-working spaces have become very popular due to the model of pay-as-per-use with reasonable and defined rates for the set of offered services.
Also, these shared office spaces have certain unique amenities like a food court, crèche services, gaming zones, spa, gym, sleeping pods etc. These all extra amenities have made these offices even more popular. All these amenities boost the morale of the staffs very positively which historically advances productivity. The presence of the daycare facilities provided by the trained staffs also brings a great relief to the working couples who can focus well on their work without compromising on their responsibilities of parenthood. The office spaces also have a great atmosphere with great aesthetics and interior design. These factors create a un-cluttered and relaxed environment in these office spaces which alleviate the work stress that is being often experienced by the professionals.
Trends in the co-working spaces expected in 2018
These shared office spaces offer a lot of cost savings which is also coupled with the opportunities to network with the other entrepreneurs operating from the same work space for achieving certain common goals. So, these shared offices are certainly here to stay and evolve in 2018. Irrespective of the high potential that these shared office spaces have, there are also certain factors which can prove to be obstacles in their rapid expansion. These factors include the following:
• Stakeholders' orthodox attitude- There are few property-owners who are not able to understand the concept of coworking completely and they are often found to remain wary regarding the leasing of the real estate assets to the co-working operators. Due to lack of proper awareness, they feel that it is safer to rent out their properties to the traditional businesses. Also, this has been witnessed that India has certain faults in the legal system which acts prove to be deterrents for the co-working space operators to opt for judicial battles against the landowners.
• Agreements of exclusivity- As per the exclusivity agreement, only one co-working operator can be accommodated in one specific building. This leads to the non-optimal usage of space. Here, there is a limitation exercised on the growth potential of the co-working space industry.
In spite of the above hindrances prevailing in the present times, the future of co-working is projected to be very bright by the industry experts after witnessing the increased demand for the co-working offices.
Future growth expectations of co-working offices
The co-working operating companies are the hottest startups in India as they are receiving millions of investments from the top investors. The work culture is gradually evolving with the more and more adoption of the co-working spaces. There is an average of 85% occupancy of the available co-working spaces in India at the present times. This has been proven that a minimum of 20-25% of operational costs can be saved by adopting the co-working spaces. At times, it is even higher hanging on the nature of your business.
The experts are of the view that co-working is going to be a dominant trend in India and this is certain that it is not just an ephemeral style which is likely to fade away like mullets and bell-bottom jeans. As per the observations, this is being predicted by several experts that India offers a fertilizer ground for the immense growth of the co-working spaces. The reasons that account for the high demands of co-working spaces are the booming ecosystem of startups and the large list of flexibility attached to the co-working spaces.
Big investments are already in
India has been witnessing the demand for the co-working spaces not only from the startups and freelancers but also from the major business conglomerates and corporations. The expected funding in the co-working space provider companies is expected to be $ 400 million in 2018. 70% of the business opportunity is expected from the big corporations.
Crucial statistics related to the Indian co-working phenomenon
Delhi, Mumbai and Bangalore are the cities which are already experiencing a rapid growth when it comes to the demand for the coworking spaces. The expectation is that there would be around 400 shared offices across India by the end of 2020.
In 2018, the experts from this industry are predicting there would be a rise of the exclusivity agreements. This would mean that there would just be one coworking space in a single building. This is providing to temporarily dampen the market of the coworking operators and also lead to the non-optimal usage of the amenities and space. There are big players like Cox & Kings, Sequoia and Paytm already invested in the coworking space market and then they may face a temporary setback in 2018.
The experts from this industry are forecasting that the co-working spaces would soon do away with the lease-based models which have certain restrictions attached to the same. They are likely to implement a unique ownership model which offers even more flexibility at an even less price. The demand for co-working spaces are skyrocketing at the present times and this is a sign that the future growth of the co-working spaces is clearly on the cards.
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