Coworking began as a freelancers’ movement, but it has since evolved into a viable real-estate business for landlords and operators, as well as a key component of occupier strategy. Coworking spaces in India are rapidly growing, with the industry expected to double every year shortly. Coworking spaces currently occupy 10% of office space, with the percentage expected to increase to around 25% in the next few years.
Expected future trends in the coworking spaces
The workspaces that startups occupy are evolving with the startup ecosystem. There are several emerging trends in this space, particularly in the Indian market. As coworking spaces become the primary option for many new startups and tech companies, the future of coworking spaces in India seems to be very bright.
Mergers and acquisitions to consolidate businesses
We’ve already seen a few acquisitions in this space. Smaller or city-specific players will be purchased in the future or will be targets of operators looking to join or increase their presence in a single market.
new entrants & real-estate developers looking to get into the #futureofwork, are likely to target multi-city operators. As the Indian business environment remains favourable in a global context players with a national footprint may see interest from abroad.
increase in the proportion of large businesses
As large enterprises embrace this trend for their flexible and increasingly permanent workspace needs, the share of business in the shared workspace environment will continue to increase. Large corporations are approaching coworking companies for a fully-managed workspace for long-term agreements, but they want access to all of the shared amenities and the lively atmosphere that a coworking space provides.
Quality of buildings, scarcity of Grade A inventory, and product quality will all become more important as demand and supply trends shift towards large enterprises.
Niche Spaces are in high demand
As independent one-unit coworking spaces struggle to stay afloat in this changing industry, niche coworking spaces focusing on specific communities will emerge. Many coworking spaces now offer a variety of wellness and entrepreneurship-related events and workshops.
Experts predict that more niche and independent spaces will emerge in the future. While large-scale coworking will become more focused on scaling startups and corporations, this will be a parallel rung of coworking aimed toward freelancers, small businesses, and one-man startups.
Amenities for generation Z
Coworking spaces in India continue to grow as India’s gig economy grows, millennials and Gen Z employees, who currently make up over 46% of the workforce, will have a huge impact on the working culture. India now has over 5,200 startups, cementing its position as the world’s third-largest startup ecosystem. As a result, startups led by millennials and even younger workers are likely to continue to gain market share.
Consistent Shift To Tiers 2 and 3
The most popular markets for co-working operators in India were Delhi-NCR, Mumbai, and Bengaluru, which accounted for more than half of the leases in this section. The trend is gradually spreading to towns in tiers 2 and 3. The coworking behemoths are already establishing themselves in tier 2 cities, as these places hold a radiant future for coworking spaces. With the start-up culture and more MNCs planning to expand their operations in tier 2 and tier 3 cities, coworking spaces in India hold a radiant future.
Tier 1 cities are still relatively untapped, but tier 2 cities have enormous potential and provide operators with a competitive advantage by being the first to market. The infrastructure in these cities is improving all the time, and so is the demand for flexible office space.
Several big corporations have already moved into coworking spaces, but there is still a long way to go. Coworking or managed offices account for just 1% to 3% of commercial real estate inventory, according to estimates, but coworking spaces in India are nearly doubling every year.