Demand for coworking space on the rise

Bengaluru Demand for coworking space is likely to sustain in the rest half of current financial year as corporates are increasingly looking at flexible office spaces that come with less financial burden.

According to coworking operators and consultancy firms, despite weakness in demand for the overall office space, coworking segment remains a bright spot with cities like Pune, Bengaluru, and Hyderabad leading the show.

“There is weakness in the office space absorption as there is funding winter seen in the startup space. But demand for coworking space remains strong. Corporates are looking for flexible office spaces that come up with less cost (as compared to taking a lease for an office space). We see this demand as sustainable in coming quarters as demand for Grade A office space remains high,” Ashish Agarwal, Co-founder & CEO of Enzyme Office Space, told Bizz Buzz.

Enzyme Office Space, which manages over 10 lakh square feet of office space, has recently taken around one lakh sft to set up two coworking facility in Bengaluru.

Post pandemic, most corporate houses have adopted hybrid mode of working with employees being giving the option of working a few days in a week from home. Similarly, corporate houses are opting for flexible office spaces like coworking spaces for housing their employees than setting up new offices on their own. Given the cost advantage, small firms, startups and entrepreneurs are opting for coworking spaces than leasing full-fledged offices.

“The hybrid model of work took root as the perfect solution to everyone’s (employees and employers’) problem, and flexible office spaces provided the perfect recipe for an occupier comeback,” real estate consultancy firm, Anarock said in a note.

According to the real estate consultancy firm, activity in coworking office space is rising. “Flexi office spaces’ share of office activity shot up to 23 per cent in FY22-23 - a 11 per cent incremental surge against the 12 per cent share in FY20. This substantial increase of 11 per cent is the highest recorded growth across all office sectors,” Anarock said.

Among cities, Pune saw the maximum transaction in coworking spaces with a share of 40 per cent, while Bengaluru came second. Kolkata is another city which has seen good uptick in demand.

“The future demand for flexi office spaces in the country is pegged to grow further by 15-20 per cent over the next 2-3 years. However, the actual demand may well exceed this prediction,” the consultancy firm said.