MNCs do form a major stake holder when it comes to renting out office space. However, many of them are wary of coworking spaces, in spite of low rentals.
By Varun Singh
MNCs are the biggest stake holders when it comes to occupying office spaces. It was being pegged till some time ago that coworking will be the space that will even attract MNCs.
Multiple reasons like no maintenance charges, and flexible work hours to use the office space, were being attributed as the reason why large MNCs may go for coworking spaces.
The other benefits, or the biggest that would have attracted a lot of MNCs towards coworking was saving a lot of money because of lower rentals.
Yet, an insight by Anarock says that large MNCs aren’t opting for coworking spaces here, unlike most developed countries in Europe.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “On an average, coworking spaces offer a substantial price difference of 15% over traditional spaces in the top cities. While Pune offers the maximum cost advantage of 33%, Gurugram in NCR has the least at 6%.”
Puri further added, “While start-ups and budding entrepreneurs make a beeline to coworking spaces, large corporates remain wary of depending on them for their expansion. This trend is quite contrary to what is witnessed in developed European nations.”
Despite all the indubitable upsides of coworking spaces, they do have limitations and restrictions.
Apart from most of them lacking separate canteens or pantries for occupiers, they also bar corporates from organising events in common areas. Maintenance of these properties is another challenge.
While some large MNCs do use coworking spaces, these limitations have generally put large companies off the notion of embracing coworking spaces despite the lower rents.
|City||Coworking (INR/desk/month)||Conventional Commercial Real Estate (INR/desk/month)||Coworking discounting|
|MMR||18,500 – 28,500||24,500 – 30,000||14%|
|Gurugram||9,000 – 14,000||9,500 – 15,000||6%|
|Bengaluru||7,500 – 15,000||10,000 – 18,000||20%|
|Chennai||6,000 – 14,000||7,000 – 15,000||9%|
|Hyderabad||5,000 – 8,500||6,000 – 9,000||10%|
|Pune||5,000 – 10,000||10,000 – 12,500||33%|
Source: ANAROCK Research
Coworking Vs. Traditional Office – Rental Difference:
- In Bengaluru, coworking spaces charge nearly 20% lower rentals in key areas such as M.G. Road, Millers Road, Vittal Mallya Road, Residency Road, etc. The avg. monthly rental for flexible workspaces is between INR 7,500 – 15,000 per desk while rents for that for traditional office spaces rent out at INR 10,000 – 18,000 per desk.
- In MMR, coworking spaces come at 14% lower rentals in key micro-markets such as Ballard Estate, Colaba, Churchgate, Fort and Nariman Point. The avg. monthly rentals in coworking spaces is between INR 18,500 – 28,500 per desk, while for traditional office spaces it hovers between INR 24,500 – 30,000 per desk.
- In Chennai and Hyderabad, the rentals for coworking spaces in CBD areas are 9% lower respectively. The avg. monthly rentals for flexible workspaces in Chennai’s key areas likeAnna Salai, Nungambakkam and RK Salai are between INR 6,000 – 14,000 per desk as against INR 7,000 – 15,000 per desk for regular office spaces. In Hyderabad, coworking rentals in key office areas like Gachibowli, Madhapur, Manikonda and Kondapur range between INR 5,000 – 8,000 per desk, as opposed to INR 6,000 – 9,000 per desk in traditional office spaces.
- In NCR’s Gurugram, flexible workspaces command only 6% lower monthly rentals of INR 9,000 – 14,000 per desk, against INR 9,500 – 15,000 per desk in regular office spaces. A major factor keeping the price difference between the two low in Gurugram is the massive demand for coworking spaces by the start-ups and entrepreneurs in the CBD areas of the city. Gurugram is one of the major coworking hubs in the country. Also, considering high demand for commercial spaces in Gurugram, supply for Grade A commercial office spaces is low in the city.
Also Read: Coworking Cafes – The Next Big Thing?