Over the past five years, flexible space operators have emerged as a prominent force within the Indian office leasing ecosystem, consistently securing a share exceeding 15% of quarterly leasing. In accordance with the higher appetite of occupiers for flexible spaces, CBRE expects flexible space stock to touch 80 million sq ft. by the end of 2024. Over the next two years, occupiers are also likely to expand into a higher number of office locations to accommodate a growing workforce and potentially establish a presence in new markets to serve their expanding clientele better. Occupiers would explore decentralising offices through a mix of traditional and flexible spaces, as per the needs of the business. 

Furthermore, about 17% of occupiers aim to optimize their office portfolios and achieve greater efficiencies by consolidating their offices into fewer locations. This strategy allows occupiers to streamline operations and reduce costs associated with maintaining multiple offices. With the ongoing emphasis on future-proofing office portfolios, occupiers are expected to continue favoring ‘flight-to-quality’ relocations over the next two years.

Demonstrating faith in the Indian office market’s potential, occupiers remain steadfast in pursuing long-term portfolio expansion. In alignment with their broader business trajectory, employee behaviour, and hybrid working policies, almost 70% of the occupiers indicated their intention to increase the size of their overall office portfolio over the next two years. About 73% of domestic corporations and 78% of global firms anticipate a portfolio expansion of 10% or more over the next two years.

The survey also reveals sector-specific preferences for portfolio expansion in the next two years. Approximately 88% of BFSI firms surveyed anticipate a portfolio expansion exceeding 10% of their current portfolio. Similarly, 67% of GCC firms plan to increase their office portfolio by over 10%, while 53% of technology firms express a similar intention.

Offices in India are increasingly favoring an “office-first” approach, with occupiers tightening their hybrid working policies over the past two years. While the hybrid model is still prevalent, there is a growing emphasis on bringing employees to the office. According to the survey, 90% of respondents prefer being in the office for at least three days a week, with the majority preferring working full-time from office.

Further, the report states that modern and sustainable office developments that address businesses’ needs, including recreational facilities and access to public transportation, are projected to capture a larger market share in the coming years.

Occupiers expect landlords to undertake a few building / campus level measures to aid their tenants to facilitate a better office environment. Some of the key areas of focus indicated by respondents are ESG measures (like EV charging infrastructure), health, safety & wellness certifications along with green certification, improving HVAC solutions for energy efficiency, fitness & wellness facilities and employee experience. The strategic incorporation of employee wellbeing and redesign of employee experiences has emerged as a crucial element in return-to-office planning by occupiers, as per the survey. About 67% occupiers indicated that they would allocate 5% or more of their project budget towards ESG implementation.

The survey indicated a noticeable preference of occupiers to expand in smaller cities over the next few years. Global and Indian firms are increasingly exploring Tier-II / III cities as the next growth opportunity, aided by the presence of a skilled talent pool, competitive costs, and developing infrastructure and connectivity. Technology and BFSI firms are rapidly expanding in Tier-II cities, attracted by their potential. Domestic firms prefer these cities for expansion in the next one to three years. With a growing talent pool, competitive real estate costs, and improving infrastructure, Tier-II cities are poised to attract more businesses, fostering local economic growth and balanced development. Office space in these cities is shifting to modern office parks, and flexible workspace operators are expanding to cater to enterprises and start-ups.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The robust surge in occupier activity within the Indian office sector, highlighted by 2023’s absorption figures, which are the second highest ever recorded, underscores a remarkable trend. This upsurge reflects a heightened occupier confidence, driven by an expanding commercial office footprint and a growing demand for high-quality spaces. Moreover, the market has been buoyed by pent-up demand from businesses that postponed leasing decisions during the pandemic, further fuelling the current momentum.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “The survey provides valuable insights into evolving occupier preferences amidst business growth and future aspirations. The survey highlights a clear preference for ‘office-first’ policies, reflecting an accelerated return to in-office attendance. Additionally, occupiers continue to demonstrate confidence in the Indian office sector, with intentions to expand their portfolios. There’s also a strong focus on workplace transformation, emphasizing the importance of employee experience in achieving business objectives and cultivating a positive work environment.”

The survey showed a trend towards diversification in the office sector, with a preference for expanding portfolios across multiple cities. This trend is driven by factors like a skilled workforce, improving infrastructure, cost-effectiveness, government support, and the benefits of exploring new geographies. Apart from the major cities like Bangalore, Hyderabad, NCR, and Mumbai, occupiers are particularly interested in expanding in Chennai and Pune. India’s strong economic growth is fueling investments across various sectors, leading to increased demand for diverse office space requirements. While gateway cities continue to see growth in office space demand, Pune and Chennai are witnessing a surge in both office leasing activity and new office space supply.

Also Read: Flexible office space stock to rise 52 per cent by 2025 to 81 mn sq ft on strong demand from corporates

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·      New seats to come up at prime locations in Sarjapur Road, Hebbal, Koramangala, and HSR Layout

·      Urban Vault plans to enter markets in Delhi, Hyderabad, and Pune in the coming year

Urban Vault, one of the leading managed office space providers in India, on Monday announced the addition of 10,000 desks across major micro-markets of Bengaluru as part of the company’s strategy to expand its portfolio to meet rising demand for flexible workspace.

Founded in 2018, Urban Vault currently has 15,000 desks across 40 centres in Bengaluru. The total area under its portfolio is 10 lakh square feet. With this latest addition, Urban Vault’s total inventory of managed co-working seats in Bengaluru will surge to an impressive 25,000.

“There is a huge demand for managed flex spaces from corporates of all sizes. We are expanding our portfolio in a big way. We are adding 10,000 seats across prime locations in Bengaluru,” Urban Vault Co-founder and CEO Amal Mishra said.

The company will add around 3,000 seats in Sarjapur Road, 3,000 seats in Hebbal, 2,000 seats in Koramangala, and 1,000 seats in HSR Layout.

The average rental cost per seat is Rs 10,000.

With addition of 10,000 desks, Urban Vault’s total portfolio will reach 25,000 desks in Bengaluru. The number of centres will increase to 45 and the total area under the portfolio will reach 15 lakh square feet.

“Flexible workspace has become a preferred option for corporates looking to expand their businesses. Even those companies which are accustomed to traditional office setups are opting not to renew their lease agreements, instead transitioning towards co-working spaces,” Mishra said while talking about the potential of the flex space market.

Mishra highlighted that managed office space offers flexibility and helps corporates save on capital expenditure. “Corporates do not have to worry about managing physical infrastructure and housekeeping of their offices,” Mishra said.

Urban Vault’s innovative solutions and customer-centric approach have been instrumental in its success. From private offices to virtual spaces, the company delivers tailor-made, high-quality solutions. This allows businesses to redirect their focus towards their core activities, while Urban Vault takes care of their workspace requirements.

Leading enterprises such as BluSmart, and Gensol Group have already recognized the value of Urban Vault’s flexible workspaces. These spaces foster agility and innovation, making them a magnet for high-calibre professionals.

Looking ahead, Urban Vault is poised for extensive expansion, with plans to enter markets in Delhi, Hyderabad, and Pune in the coming year. This strategic move is driven by the company’s vision to offer its transformative workspace solutions to a wider audience.

Also Read: The future of Co working spaces: Innovative designs in technologies to boost productivity

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Finding a right workspace in Delhi that suits your business needs as well as fits in your budget can be a daunting task, especially for a beginner. We have prepared a detailed beginner’s guide to choosing a coworking space in Delhi that you should follow.  With the right guidance and in-depth knowledge of commercial real estate, you will be able to find your perfect office space at the best location in Delhi. Now, the question arises which workspace option is better for your startup company – conventional office setup or coworking space. Well, given the current scenario in the corporate world, more and more companies and young startup owners are giving preference to coworking spaces due to their flexible terms and affordable rates.

Everyone knows that there is no dearth of coworking spaces in Delhi NCR but still you can’t just take a lucky dip to select where you’re going to work from. Here are some of the important things to keep in mind while finalizing any workspace: 

1. Check Your Financial Affordability

Financial planning is one of the most important factors of establishing a new business venture. Hence, it should be done properly, especially at the start-up stage of your company. It doesn’t matter whether you are a self-funded company or receiving investment from another entity, you must make the best use of your resources. So investing large sums of money in office space makes no sense. If you want to work from a coworking space in Delhi, do your homework before deciding on one. Coworking space amenities vary depending on price and location. So, stay within your budget and avoid overspending on shared workspace.

2. Location of the Workspace

Location of the coworking space is another crucial factor that you should keep in mind before committing to any terms and conditions. You should avoid having your workplace at an inconvenient location. Facilities like easy access to transportation such as buses and metros, places to eat and parking space are essential elements that you should always consider when choosing a coworking space in Delhi. You don’t want to get stuck in traffic and waste your time and energy each day.

3. Evaluate Amenities

There are multiple coworking spaces in Delhi that provide numerous amenities to their members. Some of the most common amenities offered by these shared office spaces are – high-speed internet, meeting rooms, conference rooms, pantry, printing and scanning facilities etc. Evaluate these amenities carefully and analyze what kinds of facilities you will be needing to run your business operations.

4. Check the Ambience of The Space

The ambience of an office space creates a huge impact on the productivity of employees. People who work in a bright and airy environment are more productive during the day while dingy workplaces make employees feel bored and unmotivated. Therefore, office ambience plays an important role in keeping employees’ spirits high. When you go for a site visit, notice the ambience of the coworking space properly and analyze whether you will be comfortable working from there every day.

5. Learning and Networking Opportunities

The concept of coworking spaces is very popular among young working professionals because of the networking opportunities they provide to their users. You will be surrounded by other go-getters like yourself, who would be willing to help you out to grow in your field. Such an environment is perfect for bouncing ideas off each other, sharing resources, and collaborating on projects that would otherwise be impossible without the support of others in the workspace. 

6. Ask About Security

Apart from the location and amenities, security is also a major aspect to consider before booking a coworking space in Delhi. Please look into the security protocols of the coworking space carefully. Do they keep an entry log? Are there CCTV cameras on the floor? Is the neighbourhood well-lit at night? This is not directly related to profits, but providing employees with a safe environment to work in will reduce distractions and make them happy about working for you.

7. Read Reviews

Before selecting a coworking space, read online reviews about it. This will give you an idea of other members’ experiences and allow you to make an informed decision

To sum up, choosing the right coworking space in Delhi could be a challenging task if you don’t have proper knowledge about commercial real estate. Therefore, it is advisable to take the advice from experts prior to signing any document. Check for all the essential factors such as location, prices, amenities, environment, security, and brand image, only then book your office space.  

Also Read: Shapoorji Pallonji Real Estate signs Shahid and Mira Kapoor to endorse its VANAHA project in Pune

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The concept of coworking is becoming more well-known in India. With the economy growing big and small, entrepreneurs are looking to move away from the traditional office environment and cut expenses by moving to coworking and shared office spaces.

Coworking spaces provide all the amenities needed (sometimes) and create an atmosphere of belonging, typically lacking in traditional office spaces. The rise of coworking spaces is not something new that has come out of the Pandemic. Still, it was already famous for freelancers, digital nomad entrepreneurs, startups, and many other businesses of all sizes.

Coworking spaces provide a myriad of advantages to their customers, including the ability to participate in an extensive ecosystem and have the flexibility of costs and time, as well as an excellent platform for building professional opportunities through networking.

Coworking is becoming one of the fastest-growing industries thanks to the consequences of the pandemic and the rise of hybrid work, and beyond 2023, the industry is only expected to grow. As of June 2022, over 28000 co-working spaces exist around the world. In the US, there are over 6,200 alone. Whether it’s technology, design, or even reimagining how we view coworking spaces, there are many trends appearing on the horizon. In this article, we’ll share 10 trends that we expect to see in the world of coworking in 2023 and beyond.

One of the latest developments in coworking is the changing nature of shared office spaces, which are evolving from simply being a space to being understood as a service. Coworking-as-a-Service (CaaS) means offering not only a space but a suite of other benefits that users have come to expect. Some of these benefits include 24-hour keycard access, mentorship building, and venture capital access, to name a few. Many of the following trends in this list build upon this innovation. For example, it’s no longer sufficient to simply provide a workspace for freelancers. Coworking spaces, the people who use them, and their utility has evolved, leading users and teams to now demand services in addition to a workspace.

From a broader perspective, technology has become an integral part of the modern workplace. Taking the benefit of the doubt, I suggest that technology has become the driving force behind every successful business in the country as well as in the world. So, what are the areas where technology is playing a crucial role? The answer would be everywhere. From customer management software to virtual meetings to the key cards that allow individuals to access different segments of the workplace, technology is present at every nook and corner of today’s workplace. Increasing technological adoption is also expected to accelerate as a coworking trend. Technology enhances coworking spaces by making them much more powerful and efficient spaces.

While early coworking spaces required staffing and offered limited hours, access cards and NFC phone-enabled systems now allow 24-hour spaces to exist without staffing. Further, digital technologies enable space monitoring in case of any problems and can fully automate meeting room reservations. Utilizing automated invoicing services can also reduce staffing needs. This means that coworking spaces will become further streamlined as they adopt more technology, which is why tech adoption is at the forefront of every operator in 2023. Over the years with the use of advanced and cutting-edge technologies, the co-working segment has witnessed a more organized and streamlined work environment. Personalizing the pricing, according to the needs of a client is a very innovative idea embraced by the co-working players. One can create small packages for different needs. This is a great way to reach out to more clients and brand your co-working space as a place of innovative solutions. One more interesting innovation is that nowadays a lot of co-working spaces are using virtual reality to enhance and simplify the working process.

Finally, nobody can comment on where technology will go in the coming years. But it is evident that it has become an integral part of our workplaces. The pandemic has further underlined its importance. Today, businesses, despite their size, have adopted technology on a larger scale. This adoption of technology has helped smaller firms compete with the sharks (mega firms) in their industry, allowing them to reach a much wider customer base.

Another upcoming trend in coworking spaces is their continued innovation. In San Francisco, office buildings are at about 40% of their pre-pandemic occupancy. This occupancy issue is occurring across the world, which means that there are abundant opportunities for coworking spaces to step in and transform these derelict office spaces. Besides seizing this opportunity to entice workers back to the office, coworking office spaces will remain some of the most innovative and well-designed architectural spaces. These innovations will blend open-space concepts, with private meeting suites and phone spaces while locating workers in the downtown core of cities.

Coworking space is in high demand as the remote workforce and academic learners look for the ideal spot to boost their productivity. Some individuals find it easier to get work done and find more motivation when using a shared space. This is often because of the atmosphere created by seeing other productive individuals and it may feel more professional than conducting work at home. Essentially, the workflow can be positively impacted by the right design. Here is a look at the way design can foster creativity and productivity in a coworking space. Individuals perform their best in environments that are unique to their individual needs. Some people require quieter and others like the hustle and bustle of an energetic office. It is a great idea to divide up co-working spaces with a combination of single and shared desks. Consider creating open but private alcoves where people can go to focus on days when they need to. Having “we” spaces can also provide people with areas to connect and ideate together.

Work does not get done in a bubble, drawing inspiration from the views and perspectives of others is better fostered in spaces where people can face each other or sit nearby. These conditions are more conducive to conversation design and play a role in the attractiveness and functionality of a coworking space. All these factors can either foster or hinder creative workflows. Consider incorporating varied architecture, design, plants, social spaces, and food services to cater to the needs of those looking for a productive space.

Coworking spaces are no longer casual office spaces provided in office buildings; instead, they are quickly growing to be the premier location for workers to congregate. In the post-pandemic landscape, coworking spaces are poised to become increasingly valuable as they continue to evolve, meeting the needs of hybrid teams and entrepreneurs on a global level.

Also Read: Shapoorji Pallonji Real Estate signs Shahid and Mira Kapoor to endorse its VANAHA project in Pune

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On Thursday, Vestian released its report ‘Flexing the Workspace-Back to Office’, highlighting that over 7.6 lakh seats are available with flexible space operators spread across more than 1000 centers in India.

Vestian CEO Shrinivas Rao said the flexible spaces sector is at a nascent stage in India compared to other countries such as the USA and European countries. “It has grown gradually in India and flexible office stock has reached 53.4 million sq ft. Furthermore, the stock is anticipated to reach 81 million sq ft by 2025, growing at a CAGR of 23 per cent, as COVID-19 catalyzed the market growth,” he said.

The report noted that wider adoption of flexible spaces in India started in 2015-16 when the market was fragmented and unorganized. However, it has since grown rapidly and become more organized. Flexible spaces are garnering significant attention not only from startups and SMEs but also from large enterprises, the report said.

“Flexible space operators provide what occupiers are looking for – low cost, flexibility and technologically advanced spaces. While 2023 is likely to be a challenging year for businesses amid macroeconomic uncertainty and fear of recession, flexible spaces are a way to navigate global headwinds,” Rao observed.

As several companies return their employees back to office under a hybrid model, it is expected the demand for flexible spaces to rise. Furthermore, Vestian has projected that the flexible office sector would constitute around 25% of the overall office space absorption by 2025.

Flexible office spaces broadly include dedicated desks, hotdesking, coworking spaces, serviced and managed office spaces. While coworking centers are at the most flexible end of the spectrum, managed offices would be at the less flexible end, it added.

The report mentioned that there are 50 major flexible space operators. The top 10 players hold 84 per cent of the total flexible office space portfolio.

Prominent office areas like Whitefield in Bengaluru, Hitec City in Hyderabad, Baner in Pune, Andheri (E) in Mumbai, and DLF Cybercity in Gurugram are popular with flex space operators and occupiers/tenants alike.

Also Read: Amitabh, Kartik and Sara buys Offices Worth several Crores in the same building

The post Flexible office space stock to rise 52 per cent by 2025 to 81 mn sq ft on strong demand from corporates appeared first on Square Feat India.

• 12% decline in regular office leasing in FY23 compared to peak year (FY20) when it stood at 43 mn sq. ft. across the top 7 cities
• Coworking share of office leasing activity shot up to 23% in FY22-23 – this 11% surge is the highest recorded growth across all office real estate sectors
• Pune tops out with coworking spaces occupying a transaction share of 40% in the current fiscal, followed by Bangalore with 30% and Kolkata with 21%
• Demand for flexi office spaces pegged to grow further by 15-20% over the next 2-3 years.

In FY2022- 2023, the Indian commercial real estate sector witnessed multiple highs and lows due to the global economic downturn. Although the early half of this period looked promising, it was followed by the tremors of a recession in key global economies. Consequently, companies stayed wary of leasing large corporate spaces, ultimately decelerating commercial office growth.

The Silver Lining – Flex Office Spaces

The contracting regular office real estate market found respite in the concurrent coworking sector’s expansion. While businesses around the world were looking for ways to cut costs, coworking did what it does best – provide flexible, expandable, and enterprise-level offerings to businesses that were seriously re-evaluating their options.

The Covid-19 pandemic had turned the tables on the regular office work model. Nevertheless, most people who had tasted the freedom of working from home soon grew tired of the lack of sociability and interaction. Simultaneously, many companies found that while WFH was too alien a concept for them to digest, there were definite advantages to not having to pay enormous permanent office rents.

The hybrid model of work took root as the perfect solution to everyone’s problem, and flexible office spaces provided the perfect recipe for an occupier comeback.

ANAROCK Research data shows that there has been a rather significant 12% decline in regular office leasing activity in the current fiscal year (FY23) compared to the peak year (FY20) when leasing stood at 43 mn sq. ft. across the top 7 cities. In FY23, leasing across the top cities stood at approx. 36.11 mnsq. ft. 

Amid this decline in regular commercial office traction, coworking has performed remarkably well. Flexi office spaces’ share of office activity shot up to 23% in FY22-23 – a 11% surge against the 12% share in FY20. This substantial increase of 11% is the highest recorded growth across all office sectors.

Which cities contributed the most to this trend?

Pune tops out with coworking spaces occupying a transaction share of 40% in the current fiscal.

Bangalore comes next with the net absorption of coworking office spaces increasing to 30%. Interestingly, Bangalore’s coworking spaces and the IT/ITeS industry emerged as overall market leaders, owning 33% and 29% of the city’s commercial space demand respectively. 

The trend is not limited to Bangalore. As more businesses seek flexible alternatives to fixed office expenditures, flex office spaces in Kolkata also account for sizeable transaction shares. 

Dominating the office leasing scene in FY23, IT/ITeSoccupiers took the lead in Kolkata office market, capturing a significant 36% transaction share. Following closely behind, coworking spaces secured a 21% share of the city’s office leasing activity, highlighting their growing popularity and demand in the City of Joy.

What the future holds

The coworking sector will have an even bigger impact in the future, since the very DNA of work has undergone a fundamental change that will not reverse in the future. The changes in the way India Inc perceives office work post the pandemic are here to stay.

Many companies that insisted on their employees returning to office have learned to regret this decision, which itself was born out of an inability to move with the times. In the IT/ITeSspace, massive layoffs have been matched by equally weighty attrition levels. In most respects, trying to go back to go back to the accustomed ‘old normal’ has had disastrous consequences.

As India maintains and amplifies its current edge as the bright spot among the world’s economies, coworking will play a central role. The future demand for flexi office spaces in the country is pegged to grow further by 15-20% over the next 2-3 years. However, the actual demand may well exceed this prediction.

Also Read: Honer Prime Housing signs Development Agreement Cum GPA worth ₹1071 Cr with Squarespace Infra

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The real estate market in India is once again on the rise. These are encouraging signs following a pandemic in which any kind of recovery was unexpected. It would not be incorrect to predict that 2023 is going to be a pleasant year for real estate. Presently, more buyers are interested in investing in Coworking spaces. More purchasing will occur in metropolitan and mid-level cities in 2023.

What began unpredictably a few years ago as a hybrid of a business centre, a shared office, and a cafe has evolved into its own entity with a distinct identity. Today, coworking spaces can be found in any city where people can – or must – work independently. There are now over a thousand coworking spaces in cities all over the world. Although most new coworking spaces will receive a lot of interest from potential customers at first, not all will fill up. Co-working spaces  are experiencing an unprecedented demand. The Occupancy rates at coworking spaces have now shot up to 90-100%, compared with 45-60% a year ago.

Coworking spaces in India are already in high demand following the global epidemic. The implementation of the hybrid prototype is driving businesses to seek out flexible spaces, which is creating new business opportunities in the sector. Businesses are starting to recognize the significance of a smart working space because it stimulates new approaches to work and tends to increase efficiency. As they embrace the co – working space culture, the young generation of entrepreneurs, linked by Multinational enterprises and other mid-sized organisations, are re – shaping the sector.

Co-working spaces are already becoming extremely relevant in the post-pandemic era, not only for business owners and freelancers, as well as for big organisations. Companies nowadays are acknowledging hybrid-work culture co-working spaces because they offer location versatility, simplified contractual arrangements, and an easy entry-exit alternative. In the middle of such a change in demand, such spaces perfectly blend in.

Coworking will continue to reside since it appeals to both small and large businesses. Co-working spaces can profit all businesses due to their being cost-effective, convenient, and expandable. Entrepreneurs are now considering flexible work spaces to be a wise investment because it enables them to concentrate on their activities and expansions while trimming frivolous spending. Demand for coworking spaces has already nearly doubled from post-Covid-19 levels and is expected to skyrocket in the coming years.

Also Read: Coworking Share in Office Real Estate rises to 20% in H1 2022 from 6% in 2021

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By Varun Singh

Flexible working will help fight climate change. A study by The Regus has analysed benefits of flexible working on the environment.

There’s a new and unlikely weapon in the fight against climate change – flexible working. As co-working spaces are increasingly located outside of major city centers and business districts, lengthy and environmentally damaging commutes are becoming a thing of the past.

Globally as the growth of flexi-working explodes in areas outside of major cities, new research reveals that, by 2029, ‘outer city’ office spaces will reduce carbon emissions by the equivalent of 1,280,000 transatlantic flights between London and New York each year. That’s 2,560,000 metric tonnes of carbon stopped from entering the atmosphere annually, just by working nearer to home.

For India, the carbon saving will see a reduction of 181,000 metric tonnes of carbon emissions per year. In polluted cities, like Delhi where pollution routinely reaches hazardous levels, we will witness a significant impact on air quality. 

Suburban flexible workspaces can play a significant role in helping to decrease fossil fuel consumption, carbon emissions and other pollutants in order to reduce carbon footprint. Enduring long commute hours is environmentally damaging and is becoming a thing of the past.

By allowing people to work closer to home, a local office space will save workers an average of 9,532 hours per year in reduced commuting times, equating to a reduction of 54 metric tonnes of carbon emissions per centre, per year.

The report also revealed that those moving from flexible working at home to a co-working space will be doing their bit for the environment. That’s because it’s likely to be more energy efficient to ventilate and light a shared space than a home for one, solitary worker.

Mark Dixon, CEO for Regus’ parent company IWG, said “Commuting can be uncomfortable, unfriendly, and incredibly time-consuming. It is also a huge source of global pollution. In an age where every business and an individual have a responsibility for their environmental impact in the world, commuting into major cities is keeping them away from fulfilling their responsibility.”

“Over the next decade, we expect to open many more locations in smaller towns, cities and suburban areas. Our vision is that soon there will be a professional workspace available on every corner; ending the idea of commuting for good. This will benefit our personal health, as well as that of our planet.”

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By Varun Singh

Coworking spaces are forcing people to rethink. With the changing dynamics, it is imperative that cafes remain upbeat, creative and ahead of the pack. Their new-age millennial customers are also constantly looking for more. This has given rise to the co-working culture in coffee bars or cafes, leading to a stupendous rise in the number of not only the usual coffee chains but also concept cafes or bistros across cities.

To keep their business afloat, cafes are continuously re-strategizing their business and need to be at their creative best. “For instance, in Delhi, cafes such as Social Offline and Flyp@MTV were regular cafes wherein around 45-50% of the seats remained vacant during the day. They have now reinvented themselves and not only turned their establishments into café-cum-coworking hubs but also transformed into full-blown bars later in the evening,” says a report by Anarock Property Consultants.

This strategy adroitly wires into the quintessential millennial ethos of working hard and partying harder. It is the time-honoured formula of maximum utilization of existing resources with an aggressively creative twist.

The widespread opportunities for such reinvention also help them to re-establish their brands. From mere hang-out joints, many cafes are becoming hubs where the millennials work from, with the perfect chill ambience, hi-tech facilities and free Wi-fi – with the added benefit of F&B, which enables them to stretch their working hours painlessly and in style.

Anuj Kejriwal, MD & CEO – ANAROCK Retail, “Rising real estate rentals, diminishing brand loyalty among millennials and rising operating costs in metros have been brewing trouble for innumerable cafes operating across India. Unable to survive the heat, many coffee shops are compelled to shut shop within 18 months into the business.”

He further added, “For instance, rentals – as a percentage of operating costs – have nearly doubled in the last few years eating away almost 15-20% of their overall revenue on an average – in prime locales, they can go as high as 25%. To make matters worse, the rise of tea bars such as Chai Point and Chaayos is also eating into the traditional coffee-led café segment.”

Also Read: Coworking Will Shape Real Estate In 2020.

Source: ANAROCK Research

It may sound easy, but it isn’t an Easy Transition, hence some points to ponder upon.

For cafés, this would appear to be a highly commendable capacity planning strategy. However, achieving such a metamorphosis is not as easy as one may think. There are several challenges to achieving successful conversion:

Space constraints – For many cafes, transforming into co-working hubs will require additional space – and scaling up is not always feasible, especially in the CBD and SBD areas where cafés invariably strive to operate in.

Location – The success of this new formula also depends on the location of the property. For a co-working space to operate with a minimum vacancy, the location of the centre/cafe must be prime. ANAROCK research indicates that co-working centres located in CBD areas have the least vacancy, while those in less central areas fail to attract footfalls.

Significantly higher investments – Such cafes will have to invest a lot more than in mere swankiness. Tech-savvy millennials want to work out of completely technologically-enabled facilities offering both wired and non-wired internet connectivity, as well as state-of-art infrastructure.

Parking – Garden-variety cafes can operate without a lot of reserved parking spaces as they tend to depend significantly on walk-in customers in the immediate neighbourhood. However, the game gets real when they transition into coworking – they need more parking spaces if they want to increase their base of working professionals.

Operating permits – The licenses for setting up a café (health trade, F&B, playing music/video, etc.) are already tedious to obtain. If an establishment wants to turn itself into a cafe-cum-coworking hub, it will need to get additional permits since these are in a way similar to office spaces.

Also Read: Now Make A Reservation At A Restaurant, For Co-Work Table.

Cybersecurity – There will be a considerable onus on ensuring safety and also cybersecurity within the premises because co-working exposes a business to several risks. For companies dealing with high volumes of confidential data, sharing space with external places such as cafes can be potentially challenging. Today, cybersecurity is a major strategic challenge for any organisation, and café-cum-coworking spaces must invest in reducing this risk.

‘Coworking cafes’ can be the ideal launchpad for start-ups – but eventually, such firms will require more professional, formal, secure and safe business environment at a reasonable cost. Cafes with co-working options are essentially informal spaces where one can begin the journey. However, as their business progresses, more organized and dedicated coworking spaces are logically the next level for any start-up – of course, at a higher cost.

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