Next big thing or hype?

Quite an interesting take on co-working (aka flexi) workspaces which have become quite a rage of late so much so that when I look around from my office window at DLF sq in Gurugram, I see the signages at most marquee towers being replaced by some or other *works.Like all changes, this will be both welcome or resisted by CRE folks, developers, IPCs, lessors depending on what suits them. The big Q - Is it going to stay & eventually cannibalize conventional lease, design & build model followed by most mid to large corporate like cab hailing apps did in B2C space OR will be contended being a marginal business after current regime of dogfight (to acquire more & more space)- resulting in cash burn for most players- ends eventually.

Some key takeaways:

• Last 3 yrs have seen 350-400 flexi space operators. Imagine!
• JLL estimates mkt size in India to be 1.35 cr users by 2020 (of which enterprises take up ~1 cr). Worldwide pie share 30% of corporate commercial property by 2030
• Ironically, the small tenant (single to few seats on the fly) for whom this concept was devised is proving to be operators' Achilles heel as they are more likely to walk away leaving latter who rent space on a 5 to 10 yr basis - in the lurch. Firms with long term commitment and more space requirement are being wooed.
• Revenue sharing & franchise model being explored by operators as straight leasing model is a big capital sucker. This can eventually become a OYO situation for lessors with a brand identity to flaunt and little moolah for their properties

#Randomusing