Unlike traditional offices, coworking allows the office space to be shared amongst employees from different organizations – kind of like work hotels. You simply check-in when required and check-out when your work is done. Though not a new concept, coworking has exploded in popularity mostly in this past decade, especially in its latter part. The industry now proudly occupies a significant chunk of the office space market, both in India and worldwide. Experts predict an upward growth curve for the next 10 years at least. In this article, we will present to you some interesting statistics and data about the coworking industry, and explain to you the reasoning behind such stellar numbers.
There has been a huge surge in the number of coworking spaces recently both worldwide and in India. The total number of spaces is projected to hit almost 26,000 by the year 2022 – a 42% increase since last year, 2019. More than 2,500 new coworking spaces are being added worldwide per year. This is only considering large scale brand namespaces. If we take into account, smaller non-franchisee standalone spaces, and cooperatively managed spaces, there are more than 35,000 flexible working spaces existing currently which creates more than. 521 million sq. ft. of office space.
The last decade saw the rise of the gig economy from its infancy as an alternative, to its rapid rise as a predominant industry choice. The gig economy favours short-term independent contractor type engagements over traditionally one company permanent employment. This allows for engaging people having specialist knowledge from outside the confines of one’s organization or workforce. This also means, however, that the gig economy is underlined by impermanence and temporary nature, which naturally makes it a very suitable patron for the coworking industry because of its check-in and check-out system with no long-term commitments. Over 38 million workers will become coworking patrons this year in 2020. Out of that, 13 million people shall be from the Asia Pacific, particularly India.
To the uninitiated, coworking has always had this impression of being the thing for freelancers and startups only. That may have been true twenty years ago during the infancy of the industry. Nowadays, however, big corporations use coworking more than anyone else. In fact, out of the potential 12-16 million seats in India, a whopping 10.3 million seats are projected to be taken up by “enterprise customers‘ or corporates. Freelancers and SMEs come a distant second with 1.5 million seats each. A 2018-19 survey by FICCI of the top coworking spaces in India reports 80% of the clientele belonged to corporates, with only 20% being from SMEs and start-ups.
Corporates enjoy numerous benefits from using coworking instead of traditional offices. For instance, having their office at a prime commercial location in any city is a top priority for any major brand as it increases the companies’ visibility, and is a matter of prestige as well. A centrally located office also makes it easy for employees and clients to travel from far distances. Getting an office at a prime location, however, can be an expensive and challenging affair. Coworking spaces provide a convenient solution in this regard as they are generally located only at the most central locations in a city. Plus, using a coworking space to set up a remote team in a strategically minor area far away from the main HQ is also a smart business decision that saves a lot of money – up to 25%. Last year (2018 -19) in India, Corporates took up 72%of the coworking spaces, up from 52% the years prior.
The increased influx of large companies has forced coworking spaces to up their game. Established corporations have more sophisticated requirements such as large lobbies, full-scale conference rooms, large cafeterias, and industrial-scale network and internet infrastructure. To accommodate such demands, coworking industries have had to upgrade their existing infrastructure and rent out generally bigger offices with scope for establishing more amenities. International real-estate giant CBRE has reported a five-time increase in the avg. area of coworking spaces between 2018-19 from 20,000 to more 100,000 sq. ft. in India, with a strong possibility of the industry riding the growth wave shortly as well.
The commercial real estate industry, which was struggling to keep up occupancy with surging property rates, has been invigorated by the coworking industry. Chairman of the FICCI Real Estate Committee and MD, Tata Realty and Infra Ltd. Mr. Sanjay Dutt expects that coworking will “redefine the entire approach” to the commercial real estate industry and create a “brand new spectrum” of opportunities for the sector.
FICCI reports that the share of the coworking industry has continuously increased since 2017 in India. From 5% in 2017 and 8% in 2018, last year the industry has seen its biggest growth to more than 12% in 2019. A large part of this growth is definitely due to the tremendous increase in the influx of bigger corporates in the industry, which we shall discuss in greater detail further ahead in this article. JLL Research has reported that the total area occupied by the coworking industry has tripled from 1.1 million sq. ft. in 2017 to 3.4 million sq. ft. in 2018. In 2019, it rose by 52% and covered more than 4.6 million sq. ft. as reported by the leading real estate group CBRE.
A discussion about the massive growth of the coworking industry is incomplete without mentioning Bangalore which saw a humongous 17% growth in 2019 itself. So if you are looking for state of the art modern coworking spaces in the Silicon Valley of India – Bangalore, give us a call at Goodworks. We have been awarded the People’s Choice Award as the Best Coworking Space in 2019, and are present in all the major business locations in Bangalore – Whitefield, Indiranagar, Electronic City, Millers Road, Manyata Tech Park, ORR-Bellandur, Church Street, ORR-Marathahalli and Varthur-Whitefield.
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