Co-working spaces to grow 50% in 2017, says JLL India chief

In FY17 has seen a massive spike in the growth of the co-working industry

Co-working spaces are set to grow by 50 per cent to over 1 million square feet by the end of the year in the country, property consultant JLL said today.

JLL research predicts that by 2025, 42 per cent of country’s population will be living and working in its urban centres. With this growth in the urban population, there will be a far greater demand for shared workspaces in less than a decade, it said. 

“Co-working is expected to receive $400 million in investments by 2018 and is set to grow by 40-50 per cent to reach over 1 million sq. ft. of leased ‘alternative’ work spaces by the end of the year in India,” said Ramesh Nair, country head at JLL India.

The year 2016-17 has seen a massive spike in the growth of the coworking industry and as it evolves further, we will witness an era of flexible office spaces, Nair said.

There are just about 300 co-working operators in the country operating less than 1,000 centres in urban India — of which less than 100 are branded spaces e.g. Awfis, WeWork and others.

“The potential market size for the co-working segment currently stands in the range of 12-16 million seats. Demand for co-working spaces is no longer only limited to freelancers or start-up employees. The staff at small emerging businesses, as well as large corporate offices, is also looking to co-working spaces to maximise their productivity,” Nair said.

With office rental costs continuing to rise across India’s business districts, the total space leased by co-working operators in the top cities could potentially stand at Rs 7-9 million sq ft. by 2020. This presents a huge opportunity in the commercial office space, he added.

Co-working spaces can lead to a 20-25 per cent cost savings as opposed to working in the traditional office spaces.

The occupancy levels for co-working spaces run by a handful of branded operators in India have been touching 100 per cent. In addition, they have been notably breaking even within Rs 5 months of launching new spaces, Nair said.