Industry scenario for Co-Working Spaces

• Coworking is an arrangement in which several workers from different

companies share an office space, allowing cost savings and convenience
through the use of common infrastructure
• With startup ecosystem gaining pace in India and Startups coming up in
every domain, co-working spaces have seen a significant rise and
adaption. 
• The three main reasons why people prefer these coworking spaces
rather than a special office are:

 Lower rate of maintenance.

 Flexible work environment.
 Place to find people with different skills.
 
Co-working Business model
1) Sub-Lease:
• This is one of the most common models used by co-working companies in India.
• In this model, the co-working operator signs a long-term lease with the property owner and then
sub-leases the property to different tenants. This model might lead to a negative cash flow for the
operator to begin with.
• This is due to the fact that there is an initial capital investment involved for the fit outs which is
borne by the operator.
2) Revenue share model :
• In this model, the property owner and the operator sign a joint venture wherein the former takes
the maximum load of initial investments for fit outs while the latter takes up the responsibility of
managing the operations.
• Usually, small time co-working operators, who cannot take the load of investing huge capital upfront
opt for a revenue-sharing model.
• The most important characteristic of such a model is that both partners benefit in case the business
flourishes and both share the burden in case of a loss.
3) Owner -operator model :
• In this model, the owner of the property converts it into a coworking space himself and operates it
on his own.
• However, in India, this model is not very common as most property owners either lack the expertise
to operate a co-working space or are too big to get into such a business model.
Co-working spaces offers many facilities on a rent. 

Basic facilities provided by most of the co-working spaces in

India provide are –

• Latest technology with fast internet

• Connectivity
• Conference Room
• Coffee and Snacks
• Registered emails
• Parking
• Events
• Tenants logos on wall
Coworking Industry in India

• Working Cospaces help in building up a community and

network around you, which helps in building up quality
contacts.
• These contacts are quite helpful for first stage entrepreneurs.
• According to JLL, In India, the first half of 2018 saw a
significant rise in coworking spaces leased, to 19 lakh sq ft
from 6.4 lakh Sqft in the first half of 2017.
• It is expected that coworking companies would lease out 6-10
million sqft space, especially in tier-1 and tier-2 cities in the
country by 2020.
Co-working spaces in India-

• We work
• Cowrk
• 91springboard
• Awfis
• Regus
Currently, the office spaces are experiencing double digit growth and these
coworking platforms prove to be an efficient solution.

The cities with the highest demand for such shared work spaces are Mumbai,
Bangalore and Hyderabad ,as these are the cities which are seeing an
exponential rise in tech and internet based startups.

The 2 big indigenous coworking spaces of India, Awfis and 91Springboard

have seen a tremendous rate of growth, both in revenue and office space.
Awfis' revenue grew almost three times in 2018-19 to Rs 158 crore from Rs 56
crore in the previous year.

Again, as per reports, in FY17, 91springboard too recorded huge growth in

revenue - making a total income of INR 19.8 Cr against INR 1.3 Cr in FY16.

The main reasons of the growth of these companies being the increasing
office maintenance costs, number of startups and scaling of these office
spaces.
According to a report by the Confederation of Indian Industries, shared
workspaces provider We Work and property consultancy JLL India, The total
number of seats in the co-working industry is about 12-16 million

Of this 10.3 million seats is occupied by large companies.

Again, 1.5 million of these seats is occupied by SMEs and another 1.5 million
by Freelancers. While startups occupy the smallest chunk of 100,000 seats.
Future of Coworking Spaces in India

• youth
• Startups
• Pacing their growth into tier-2 and tier-3 cities will be utmost
important, because cities like Ahmedabad, Pune, Vijayawada etc. are
slowly turning themselves into startup hubs.
• Currently, a coworking space either leases or opens itself in some
cafe’s, so with more deeper penetration with more affordable prices,
people might slowly drift towards these modern workplaces.
Currently, valued at around $1 Billion, the valuation might grow to $
7-8 Billion by 2022, for this workspace sector in India.