Office spaces grow despite economic slowdown, with co-working being a rising star

• According to Edelweiss, office spaces demand in 2019 so far has grown by 128% compared to the previous year.
• Co-working space’s share in overall leasing rose from 10% to 13% during the calendar year 2019 YoY.
• There are currently over 400 co-working centres across India from 200 players.

In the Indian real estate sector, office spaces continue to be a booming segment despite economic slowdown. And co-working spaces is its best performer.

According to a report by Edelweiss, demand for office spaces in 2019 grew by 128% from last year. This is aided by growth in the IT sector, along with rising number of global companies setting up shop in India. Bengaluru is now the top market in Asia for technology occupiers.

The report further said that co-working space’s share in overall leasing rose from 10% to 13% during the calendar year 2019.

Co-working spaces in India have been growing fast with over 400 centres across India by 200 players. Real estate consultant firm Anarock expects the number to jump by two-three times in the next two years.

“Co-working centres are about 15-25% cost efficient for startups and firms as they save money in office rentals, property maintenance and fixed capital investments. Anarock expects total space occupied by co-working spaces to rise by at least 30-40% per annum,” said the report.

In India, co-working spaces opened up in almost every other corner of big cities and are now also entering Tier 2 and 3 cities. They have found favour with entrepreneurs mainly for convenience, affordability, and a place to network and become a part of a community, without having to invest in real estate.

According to a report by property consultant Knight Frank, as of 2018 there were about 200 co-working spaces in India, with the likes of WeWork, Regus, Awfis etc., being the most popular.

OYO has entered this segment after it acquired Innov8 for $30 million in July 2019.