Bengaluru accounted for 35 per cent of the absorption of co-working spaces in the country in the first nine months of this year, which is highest in the country, said a new report.
Mumbai is also catching up, and accounts for almost 18 per cent of the total number of flexible office locations in the country. “Moreover, absorption of flexible offices has doubled since last one year in Mumbai from 0.38 million sq ft in 2016 to 0.6 million sq ft in the first nine months of 2017. By 2018, we are expecting a few major transactions to conclude in this segment,” said a report from Colliers International.
“The flexible/co-working space has proven to be a disruptor and an asset class in itself with offerings that meet the gaps in the expectations for corporates to address flexibility, scalability without liabilities or baggage (expansion and contraction), effective cost savings and gaining efficiency in operations,” said Ravi Ahuja, senior executive director, Mumbai & Developer Services, India, Colliers International.
In the first quarter of the calendar year, Awfis — one of the largest co-working space providers in India — raised $20 million from Sequoia Capital, which is considered as one of the biggest instances of fundraising in this segment.
In the third quarter of 2017, the co-working space accounted for 31 per cent of total gross office absorption. Colliers expects this trend to continue in the fourth quarter of the calendar year as co-working players such as iKeva and Avanta have recently announced expansion plans. In addition, Innov8, a leading co-working player, launched a 10,000-sq ft co-working facility in Mumbai’s Andheri East in Q3 of 2017. Keeping up with the current trends, Colliers expects the share of co-working in total absorption to increase by 10-15 per cent in the coming quarters.
“Looking ahead, we expect that both international and domestic players in the flexible office domain will establish presence in central, suburban and peripheral districts. Currently, flexible offices have a strong presence in most major commercial districts of Mumbai namely BKC, Andheri, Powai, Vikhroli, Lower Parel and Navi Mumbai. The footprint has increased tremendously in the last one year and we expect flexible offices to make their mark across all major Mumbai micro markets,” the report said.