Experts would agree that despite not being a new concept, Coworking spaces have started to gain traction in recent years only. However, the last couple of years remained challenging. As with every sector of the economy, the Indian real estate sector also faced headwinds and the Coworking sector was not spared either.
Now that the restrictions have eased and the economy is resurgent, the Coworking spaces have started attracting large and small businesses alike. Let us examine why trends indicate a brighter year for the sector.
Rising Demand and Positive Growth
According to the Coworking spaces, Global Market Report by Reportlinker, the Global Coworking spaces market is expected to grow from USD 13.61 billion in the year 2021 to USD 16.17 billion in the year 2022. It is despite the fact that the Omicron has affected the first three months of the year substantially. The report highlights that the resurgence in the demand is due to the resumption of office activities and gradual adaptations to the new normal.
While the world is treading the path with cautious optimism, companies are preferring cheaper Coworking spaces over costly dedicated offices. The same report pegs the global Coworking market growth at USD 30 billion by the year 2026.
In the words of a report by real estate research firm Cushman and Wakefield, the Coworking sector in India expanded its portfolio aggressively in the late half of the year 2021. To put it in numbers, the year 2021 saw an addition of 21 percent more area, to the tune of 4.91 million sq ft addition to the Coworking sector. This has set the ball rolling and prepared a solid ground for robust growth in the year 2022.
If JLL is to be believed, the Coworking sector in India is expected to cross 50 million sq ft by the end of the year 2023.
Also Read: What is the Expected Global Furniture Market Growth by 2025?
What are the advantages of Coworking spaces?
While the data suggests that the Coworking industry is being favored over traditional offices, there are certain clear advantages of this segment such as-
While starting up, new businesses are short of funds and they do not have that monetary bandwidth to spend on dedicated offices. In such cases, the Coworking sector is a savior. With dedicated space, state of the art facilities, high-speed internet, conference and meeting rooms, convenient locations, flexible payment plans and a no-strings-attached business approach helps the startups tremendously. It results in huge cost savings and minimizes logistics and capital expenditure hassles.
In addition to being a platform for startups, Coworking spaces are emerging as new centres of networking. Investors, startup founders and established business persons actively consider these hotspots of ideas for brainstorming and it presents a great opportunity for the new bees to network, learn and grow their business.
Moreover, the top metro cities such as Delhi, Bangalore, Hyderabad, Pune and Chennai have started to offer Coworking spaces for every need. Leading brands of the segment have opened their offices in these metro cities. Be it the demand for a single seat or a large business, everyone is getting reasonable options. The growth of Coworking spaces will certainly add to the overall recovery of the Indian real estate sector.
Conclusively, the Coworking sector is an idea whose time has come. Despite short term challenges due to the coronavirus, the Coworking spaces industry is all set for double-digit growth in the year 2023.
(Authored by Aman Gupta, Director, RPS Group)
