Demand for flexible office spaces has hit new high notes post the pandemic, with major companies and businesses including start-ups now opting for co-working. Latest ANAROCK data reveals that out of a net absorption of approx. 20.8 Mn sq. ft. across the top 7 cities in H1 2022, the share of co-working spaces stood at 20%. Back in H1 2021, its share was just 6% of net office absorption of approx. 9.33 Mn sq. ft.

In contrast, the share of IT/ITeS sector – India’s leading office demand driver – declined from 49% in H1 2021 to 36% in H2 2022. However, this decline is largely because many IT companies are now also preferring flexible spaces to regular office spaces.

In terms of net absorption across the top 7 cities in H1 2022, Bengaluru and Hyderabad remained on top, comprising 50% of total demand share.

Bengaluru, Hyderabad and Chennai – the top Southern cities – together witnessed net office absorption of approx. 12.2 Mn sq. ft. Of this, 18% or approx. 2.23 Mn sq. ft. was by coworking players.

Western markets of MMR and Pune saw net absorption of nearly 5.45 Mn sq. ft. Of this, 27% or approx. 1.5 Mn sq. ft. was by coworking players.
In NCR it stood at approx. 2.75 n sq. ft. Of this, 15% or approx. 0.41 Mn sq. ft. was by coworking players.

In Kolkata, merely 0.4 Mn sq. ft. office space was absorbed. Of this, 14% or approx. 0.06 Mn sq. ft. was by coworking players.

Anuj Puri, Chairman ANAROCK Group, says, “Coworking has received a major boost after Covid-19 disrupted the previous status quo. A major factor driving demand is that these spaces are not concentrated in just the city centres or major employment hubs; they’re spread across different areas, including the housing-intense suburbs. Coworking spaces are now also operating out of malls and hotels across cities. Many large office parks are also housing coworking spaces. This helps companies to remain closer to their employees and offer them flexibility.”

Another advantage is that with flexible office spaces, companies can plug-and-play at the same cost rather than wrestling with office layouts and fit-outs. The lock-in period for taking up a regular office space is anywhere between 3-4 years. All these factors have also helped boost the demand for co-working spaces.

Office Rentals
Backed by rising office space demand, average monthly office rentals are also seen to be rising across the top cities:

• NCR and Hyderabad each saw a 5% rise in avg. monthly office rentals in H1 2022 compared to same period in 2021. Currently, the avg. monthly office rents in NCR are at INR 80 per sq. ft. while in Hyderabad it is INR 60 per sq. ft.
• Bengaluru and Pune each saw a 4% yearly rise. The avg. monthly rentals in these IT hubs by the end of H1 2022 stood at INR 81 per sq. ft and INR 72 per sq. ft., respectively.
• MMR, Chennai and Kolkata witnessed a 2% rise each in avg. monthly rentals in this period. In MMR, the avg. office rentals are the highest among the top 7 cities at INR 128 per sq. ft.; in Chennai they are INR 61 per sq. ft., and Kolkata has the lowest at INR 53 per sq. ft.

Meanwhile, the top 7 cities also witnessed robust new office supply in H1 2022, aggregating to 31.8 Mn sq. ft. Bengaluru, Hyderabad and Pune dominated with a total 74% share. Given the high new completions, average vacancy levels across top 7 cities rose by 2% to stand at 15.95% in H1 2022.

Also Read: Office portfolio expansion on cards as 63% of businesses back to the office on a hybrid basis

The post Coworking Share in Office Real Estate rises to 20% in H1 2022 from 6% in 2021 appeared first on Square Feat India.

By Varun Singh

In line with their commitment towards long term growth and expansion, WeWork India, India’s leading flexible workspace provider, and renowned real estate developer Bhutani Group, today announced their long-term partnership wherein WeWork will take up entire tower comprising of 25 leasable floors at Bhutani Alphathum, in Noida. The Alphathum x WeWork partnership is one of the largest commercial real estate transactions facilitated by leading advisory firm Colliers, marking a landmark moment for the real estate sector and a testament to the reliability and trust that leading developers are showcasing towards WeWork India. 

Set to open in Q4 2022, WeWork Alphathum will be spread over an area of 660K+ square feet and will house over 8,500 desks over multiple phases driven by demand to offer a spectrum of flexible workspace solutions. The partnership brings together WeWork India’s innovative flexible workspace solutions and Bhutani Group’s futuristic business destinations, creating enhanced solutions that cater to the evolving nature of work and workspaces.

Situated in a prime location, Alphathum provides a host of benefits through its proximity to the upcoming infrastructure developments including the expressway. The building is equipped with world class amenities for the members including access to a rooftop infinity pool, bowling alleys, dining areas and more. Designed as a steel structure, the building consists of three high rise towers interconnected by a common terrace and is tailor-made to meet the workplace requirements of businesses of all sizes. The building is well connected through various modes of transport including road and metro allowing easy access to professionals from all parts of the city. Bhutani Alphathum and WeWork’s long term deal demonstrates the potential created by the changing face of workspaces in India.

Ashish Bhutani, Chief Executive Officer, Bhutani Groupcommented, “We welcome WeWork at Bhutani Alphathum and are committed in providing them with the highest quality of services. We look forward to a long-term mutually beneficial association which will be significant with respect to vibrant business activities and participation from prospective business communities.”

Arnav S. Gusain, Head of Real Estate, Product and Procurement, WeWork India said, “We are delighted to partner with a pioneer like the Bhutani Group and expand our network in Noida through Bhutani Alphathum. We would also like to thank our partner, Colliers who played an instrumental role in helping us secure our largest expansion deal till date. Through this partnership, we not only look forward to strengthening our presence across the Indian market but also showcase a promising future for the consistently rising demand for flexible workspace industry in India. We will continue to meet the evolving needs of our members across the country through such partnerships and service offerings in the future as well.”

Bhupindra Singh, Managing Director, North India at Colliers added, “Wework, One of India’s largest co-working players caters to a diverse mix of clients providing them with flexible workspace solutions. Now expanding their footprint in Bhutani group’s iconic development Alphathum, WeWork will establish a strong presence along Noida – Greater Noida Expressway. An established micro-market with a strong retail presence and a well-defined residential catchment. Colliers is proud to have created synergies for like-minded parties through this transaction and is excited to witness their journeys.”

Bhutani Alphathum is a futuristic business destination with the promise of an excellent location, lucrative investment opportunity that’s coupled with premium facilities to its members. With the launch of this building, WeWork aims to curate a superior workspace experience for members and employees, while creating long term value for landlords. WeWork and the Bhutani Group have reinstated their contribution towards incorporating flexibility into the dynamic commercial real estate sector in the country through Bhutani Alphathum.

Also Read: NCR Unsold Stock Declines 12% Y-o-y, West India by 10%, 32% Increase in South India

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