The co-working segment will continue to play a pivotal role in the recovery of Indian real estate. On the back of higher demand, the segment will offer elevated ROIs, therefore attracting investors, landlords, and developers in big volume, says Nakul Mathur, MD, Avanta India.
In an exclusive interview with Sanjeev Sinha, Mr Mathur talks about the growing importance of co-working spaces in the post-pandemic world and shares his business outlook. Excerpts:
Co-working spaces currently appear to attract not only a specific group of people but also MNCs and investors. Will this become a more common occurrence in the future?
Co-working spaces offer an economical, convenient, and scalable option to MNCs and other mid-sized enterprises as well. They come with the flexibility to upsize or downsize. One can increase the number of desks as and when new people are hired, thereby optimizing the overall CAPEX and OPEX. Meanwhile, renting traditional space comes with inflexible agreements, which lead to noticeable fluctuation in rates and sometimes huge expenses for setting up and running the space.
When opting for co-working, one can opt for fixed membership rate with all benefits rolled into a single package. This accounts for annual escalations calculated based on property costs, operational expenses, and management fees.
Just like smaller enterprises, in a post-Covid world, MNCs are other enterprises that also want to stay agile to respond to changing conditions. Amidst such a shift in demand, co-working spaces fit in very well.
Like any big trend of the past, co-working is here to stay for a long due to its inherent benefits attracting both smaller as well as larger enterprises.
How do co-working spaces intend to make a comeback after the pandemic?
Co-working spaces will become the need of the hour in the post-pandemic world, not just for entrepreneurs and freelancers, but for bigger companies as well. As co-working offers location flexibility, simplified agreement, and easy entry-exit option, businesses are now accepting co-working spaces with a hybrid-working makeover.
For enterprises in India, managed offices are the right solution where they have a dedicated space to themselves but don’t have to bother about managing the office infrastructure. In this way, they focus on their core business without being involved in other nitty-gritty. The demand for co-working will continue to soar in the foreseeable future.
How will the co-working industry look like in 2022-23?
The co-working category will continue to expand in the present fiscal. It is estimated that around 42% of the population in India will work in ucentersntres and a sizable part of the office demand will come from the co-working/ managed office space.
Enterprises have acknowledged the fact that a smart workspace leverages the growing digitalization and encourages new ways of working while improving workforce efficiency. Meanwhile, they will also help businesses to reduce their costing. The office of the future will, thus, most likely include highly networked, shared, multipurpose spaces that will reduce cost and improve everyone’s performance.
What role will Fexible office spaces play in the growth of the real estate industry in the near future?
The co-working segment will continue to play a pivotal role in the recovery of Indian real estate. On the back of higher demand, the segment will offer elevated ROIs, therefore attracting investors, landlords, and developers in big volume. Increasingly institutional players will enter the space, lured by its long-term potential, which will further bring structure and organization to the business.
How are shared spaces doing in times of the pandemic? What kind of trends is visible in this space right now?
With high-density offices becoming a thing of the past, the new format will cater to the changing preferences of the workforce as it offers a more collaborative and open space.
The year 2022 is expected to witness office spaces with a lot of open spaces and natural touch. As the pandemic has shifted the focus on social distancing and a healthy work environment, offices will be duly ventilated. Likewise, there will be increased use of sustainable materials such as bamboo, installation of indoor plants, efficient air conditioning, etc.
There will also be an increased pivot to modern technologies such as AI. The World Economic Forum (WEF) believes that in the post-pandemic year 2022, the office spaces will be highly tech-enabled. The AI (Artificial Intelligence) assisted job roles, and office environment will be a common sight. The usage of sensor-based dispensers, adaptive technologies, and robotics will be preferred in the minimal touch-inspired new normal. AI in offices will primarily be used for repetitive tasks and will let the humans focus on creativity, imagination, and the strategic part.
While technology will help the office occupiers, it will also help the operators in saving a significant cost.
What sort of changes did you make in your company after being hit hard by the pandemic, and what are your expectations for 2022-23?
Being a Flexi office operator, we have always understood the value that an office space adds to the culture and productivity of the organization. Hence, we have added more flexibility to our office spaces and for our team to operate seamlessly.
The use of collaboration spaces has increased that can nurture group productivity without compromising on safety. Despite returning to the office, we know the overall zoom meetings will continue to be high. Hence accordingly we have modified our spatial arrangement.
Social distancing remains a major factor to look out for and we have made adequate arrangements to ensure that it’s followed.