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Coworking in India Expected to Grow by Over 50% in 2017

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Authored by Ramesh Nair, CEO & Country Head, JLL India

Coworking is a disruptive business model that is redefining how we look at the office spaces today. With marginal slowdowns in the global economy and an ever expanding class of millennials who know exactly what they want, we are seeing workplace reforms in India—where ‘Uber-Cool’ and ‘Chic’ workspaces are becoming the norm. With this paradigm shift, the coworking industry is experiencing tremendous growth as well.

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

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.

The first ever research on coworking in India is a joint product by WeWork, the largest coworking operator in the world, and JLL. Future of Work: The Coworking Revolution shares insights on this disruptive trend driving the commercial office segment. Here are some of the key highlights that I found interesting:

  • Coworking is expected to receive $400 million in investments by 2018, and is set to grow by 40-50% to reach over 1 million sq. ft. of leased ‘alternative’ work spaces by the end of the year in India. This presents a huge opportunity for occupiers with easily accessible, affordable, on demand workspaces.
  • The potential market size for the coworking segment across India currently stands in the range of 12-16 million seats. Demand for coworking spaces is no longer only limited to freelancers or start-up employees. Staff at small emerging businesses as well as large corporate offices are also looking to coworking spaces to maximize their productivity.
  • There are just about 300 coworking operators in the country operating less than 1,000 centers in urban India - of which less than 100 are branded spaces e.g. Awfis, WeWork
  • The occupancy levels for coworking spaces run by a handful of branded operators in India have been touching 100%. In addition, they have been notably breaking even within ~5 months of launching new spaces.

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

Coworking spaces can lead to a 20-25% cost savings as opposed to working in the traditional office spaces

The emergence of coworking has led to a fundamental change in attitude toward the traditional office format and we are already seeing the first signs of disruption. I encourage you to get ahead of the curve and turn disruption into opportunity. Have a question? Share them with me and I’ll be in touch.

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