Flexible office spaces: A closer look at the sector, what's in store this financial year?

Flexible office spaces, also known as coworking spaces, have been on the rise in India over the past few years. Several factors, including the rise of startups, the growth of freelancing, and the need for cost-effective and flexible workspace solutions have driven the demand for flexible office spaces.

A recent report by JLL, a global real estate services firm, the flexible office space market in India is expected to grow at a CAGR of 15-20% over the next five years. The report also states that flexible office spaces will account for 10-15% of the total office stock in India by 2023.

COVID-19 pandemic has also accelerated the adoption of flexible office spaces in India as companies have been forced to adopt remote and hybrid work models. This has led to an increased demand for flexible office spaces that provide employees with a safe and collaborative work environment.

The Indian government has also taken several initiatives to promote entrepreneurship and startups, such as the Startup India initiative. These initiatives are expected to boost further the demand for flexible office spaces in the country.

Factors fueling the demand for co-working spaces??

There are several factors that are fueling the growth of flexible office space in India:

• Rise of Startups: India has witnessed a surge in the number of startups in recent years, which has led to an increase in the demand for flexible office spaces. Startups prefer flexible office spaces as they provide cost-effective and flexible workspace solutions.

• Growing Freelance Economy: With the growing gig economy, more and more people are choosing to work as freelancers. Flexible office spaces provide an ideal work environment for freelancers as they offer affordable and flexible workspace solutions.

• Cost-Effective: Flexible office spaces are a cost-effective option compared to traditional office spaces. They provide businesses with the flexibility to rent space for as long or short a period as they need, which helps them save on overheads.

• Amenities: Flexible office spaces come with several amenities, including high-speed internet, conference rooms, printing and scanning services, and more. This helps businesses save on the cost of setting up an office and focus on their core activities.

• Expansion: As businesses grow and expand, they need more space. Flexible office spaces provide businesses with the flexibility to expand or downsize as per their requirements.

• Government Initiatives: The Indian government has launched several initiatives to promote entrepreneurship and startups, such as Startup India. These initiatives have led to an increase in the number of startups and the demand for flexible office spaces.

The big players in the sector

There are several players in the flexible office space market in India, ranging from large multinational companies to smaller local players. Some of the prominent players in the Indian flexible office space market include:

• WeWork: WeWork is a global flexible office space provider with a significant presence in India. They offer co-working spaces and private offices to businesses of all sizes.

• Regus: Regus is a multinational company that provides flexible office spaces, virtual offices, meeting rooms, and business lounges. They have a significant presence in India, with several locations across major cities.

• Awfis: Awfis is an Indian flexible office space provider that offers coworking spaces, private offices, and virtual offices. They have a presence in several major cities across India.

• Smartworks: Smartworks is a flexible office space provider that offers coworking spaces, private offices, and virtual offices to businesses of all sizes. They have a significant presence in India, with over 30 locations across major cities.

• 91springboard: 91springboard is an Indian flexible office space provider that offers coworking spaces, private offices, and virtual offices. They have a significant presence in India, with over 30 locations across major cities.

• IndiQube: IndiQube is an Indian flexible office space provider that offers coworking spaces, private offices, and virtual offices. They have a significant presence in India, with over 50 locations across major cities.

• OYO Workspaces: OYO Workspaces is a flexible office space provider that offers coworking spaces and private offices. They have a significant presence in India, with several locations across major cities.

In addition to these players, there are several other smaller local players that operate in specific regions or cities in India. The flexible office space market in India is highly competitive, with several players vying for market share.

What’s in store this financial year?

The flexible office space sector in India has been growing steadily over the past few years, and it is expected to continue to do so in the financial year 2023-24. The COVID-19 pandemic has accelerated the adoption of remote and hybrid work models, which has increased the demand for flexible office spaces. This trend is expected to continue in the coming years.

Some of the key trends that are expected to shape the flexible office space sector in India in the financial year 2023-24 include:

• Hybrid Work Models: As businesses continue to adopt hybrid work models, the demand for flexible office spaces that provide a safe and collaborative work environment is expected to increase.

• Technology: With the adoption of remote work, technology is becoming increasingly important in the flexible office space sector. Expect to see more companies investing in technology to provide a seamless and secure work environment for their clients.

• Increased Competition: With the growth of the flexible office space sector in India, competition is expected to increase in the financial year 2023-24. This could lead to more innovative offerings and better pricing for clients.

• Expansion: With the rise of startups and small businesses, the demand for flexible office spaces is expected to grow in tier-II and tier-III cities in India. Expect to see more flexible office space providers expanding their operations to these cities.

• Sustainability: With the growing awareness of environmental issues, sustainability is becoming an important factor for clients choosing flexible office spaces. Expect to see more providers adopting sustainable practices and offering eco-friendly workspaces.

As we see flexible office space sector in India is expected to continue to grow in the financial year 2023-24, driven by the adoption of hybrid work models, technology, increased competition, expansion, and sustainability.