Co-working offices, business centres turn hybrid for revenues

Offices are now going the hybrid way, with co-working spaces and traditional business centres borrowing elements from each other and offering a mix of options to maximise their revenues.

“Independent co-working spaces have started adopting a few principles of the business-centre model by privatising certain parts of their co-working spaces. Co-working market is flourishing, and as demand soars, business centres are adapting their offerings to fulfil the demands of businesses that want flexibility in their workspaces,” read a recent report by Vestian Global Workplace Services, which offers occupier-focused workplace advisory solutions.

One of the reasons why business centres are making room for co-working sector is to catch up with the increasing trend of flexible workspace solutions, which helps the business centres generate revenue from their otherwise unoccupied space.

On the other hand, business centres can bring in a diversified workspace to the co-working sector, to help them to strengthen their market presence. “We will witness more co-working spaces mushrooming across cities and towns,” added the report – The Evolution of Flexible Workspaces in India and the Way Forward, by Vestian Global.

Sudeep Singh, co-founder of shared offices provider GoWork, told DNA Money that though there is a larger requirement for co-working spaces, the managed built-to-suit option too is a promising business for them. “For the company or client, it provides flexibility to increase or decrease the total number of seats whenever required, which isn’t so when they sign up with a business centre. This helps the companies in managing their operating costs in a better way,” said Singh.

In the last couple of months, GoWork’s leased out its space in Gurgaon’s Udyog Vihar to Paytm and Zomato, which occupy around 150 seats each. Close to 400 seats have been given out to Travel Boutique.

In Bengaluru, CoWrks, another provider of co-working solutions, had earlier received a demand for 50 seats from Bharti Airtel, which eventually increased to 150 seats, thereby giving flexibility for the organisation to resize their floor space or office size.

This trend has picked pace since the beginning of this year.

WeWork, another player in co-working offices, has tied up with Amazon for 400 seats in Bengaluru.

“Such a move is a win-win for the corporate customer as well as space solution provider. Co-working space provider gets to lease out a sizeable area, say an entire floor, to one client instead of marketing and servicing various clients who would have occupied the same space,” said an industry expert.

Vestian Global’s CEO for Asia Pacific Shrinivas Rao said, “Several multinational firms and BFSI (banking, financial services and insurance) corporates are currently in talks with co-working operators for providing them with end-to-end solutions. Further on, as more and more companies start to move away from the capex (capital expenditure) model to an opex (operating expenditure) model, this may be the future of real estate spaces.”

The success of such a hybrid model is evident with the fact that CoWrks has assigned as many as 1,000 seats to consultancy firm KPMG in Bengaluru.

Even Chennai has started adapting to this model with SmartWorks providing 600 seats to Episource, a healthcare analytic and business technology solution company.dnaindia