Gurugram emerges as preferred coworking hub

Gurugram has emerged as the most preferred location for flexible workspace operators in Delhi-NCR; clients like the idea of zero maintenance and their employees love the amenities.
The Gowork office, at Plot 108, Udyog Vihar phase 1, in Gurugram. The city has emerged as a hub of co-working spaces and these collaborative spaces are helping professionals finally achieve the elusive work-life balance.(Yogendra Kumar / HT Photo)
The Gowork office, at Plot 108, Udyog Vihar phase 1, in Gurugram. The city has emerged as a hub of co-working spaces and these collaborative spaces are helping professionals finally achieve the elusive work-life balance.(Yogendra Kumar / HT Photo)
Updated on Aug 19, 2019 11:33 AM IST
Copy Link
Hindustan Times,Gurugram | By

Thoughtful design, colourful interiors, flexible timings, lower cost of operations and, most importantly, freedom from the mundane and costly job of maintaining a traditional office has ensured that co-working spaces are becoming the go-to option for individuals and firms looking to rent space in Gurugram as well as cities across the country. While the initial fillip to this segment was given by start-ups, freelancers and professionals, the demand is now increasingly being fuelled by medium and large corporates, say most Gurugram-based operators.

Clients are increasingly finding these offices more economical, they like the idea of zero maintenance, and their employees love it for the freedom and choices these spaces offer, they further add.

Across the country, Delhi-NCR, after Bengaluru and Chennai, has shown the third-highest increase in flexible office space, as large deals in 2018 took the coworking share from 4% to 9% of the total in office-leasing space in the region, states a report released by real estate consultant JLL on June 28.

Gurugram has also emerged as the most preferred location for flexible workspace operators in Delhi-NCR—64% of new leases in 2018 were made here, according to Colliers, another real estate consultancy firm.

Pan-India data shared by JLL reveals that cumulative space released by coworking firms in the last two years has doubled from 2017 to 2018 and is expected to increase in 2019 in Grade A buildings. In 2017, 1.9 million sq ft was leased by coworking spaces; in 2018 it was 3.9 million sq ft; and in the first quarter of 2019, the flexible working space has added 1.1 million sq ft area to the already existing space.

Due to this reason, real estate professionals assert that coworking space, which until now was considered niche, will play a key role in the growth of the office real estate in the next few years. “Over the next three years, we expect the flexible workspace market to grow rapidly with the rise in demand from large companies and start-ups alike. We expect occupiers from information technology, business process management, banking, financial services, and investments, as well as the fast-moving consumer goods (FMCG) sector to continue taking up space in flexible workspace centres,” Sanjay Chatrath, managing director, North, Colliers International India, says.

Office-goers play chess at a coworking space in Gurugram. Experts say corporates want their employees to experience a flexible work environment as a majority of the workforce comprises millennials. (Yogendra Kumar/HT PHOTO)
Office-goers play chess at a coworking space in Gurugram. Experts say corporates want their employees to experience a flexible work environment as a majority of the workforce comprises millennials. (Yogendra Kumar/HT PHOTO)

In Gurugram, three important micro-markets for this segment have evolved, including Cyber City, Golf Course Road, and Udyog Vihar, where major flexible space operators have leased space and are offering customised solutions based on demand.

As per Colliers, major deals that took place in 2018 in Gurugram included the launch of WeWork (a 2.25 lakh sq ft shared office space at DLF Cyber City in DLF Forum), the opening of another WeWorks (a 1.2 lakh sq ft space at Two Horizon Centre at Golf Course Road) and a 75,000 sq ft space launched by 91 Springboard in Udyog Vihar.

The major deals in 2019, as per ANAROCK, a real estate consultancy, included a launch by Skootr, which leased 22,000 sq ft of office space at DLF Square, GoHive, which leased 50,000 sq ft of space in Udyog Vihar, and Garage Society, which leased nearly 19,000 sq ft of space at Cyber City. Several smaller deals took place across the city, which gave a further boost to this space.

Prashant Garg, country manager, Garage Society, a Hong Kong company, which operates spaces in Udyog Vihar, Cyber Hub and Golf Course Extension Road, says that occupiers in Cyber City are large corporates and mature start-ups, which can now afford to pay for premium space. “There are different types of clients. In Udyog Vihar, most people are looking for low-cost solutions and smaller ticket sizes. Golf Course Extension Road has mostly medium and large companies which have rented spaces for its employees,” he says, adding that their objective is not to provide real estate but to create a space where communities of talented professionals are formed and they focus on their competencies while enjoying their work.

Rajiv Bathla, CEO, The Circle.Work, which is located at the HUDA Metro station says that customised office spaces, great amenities and an ecosystem that supports the community are attracting different kinds of occupiers to these spaces. “We have a television channel operating in our shared office, a large media house, and online shopping portal working alongside medium-level start-ups. Our USP is that people can get down from the Metro, come to work, and go back home,” he says.

Flexible space operators further say that the reason small as well as large firms are attracted to them is that they allow easy flexibility of scaling up or downsizing, offer an opportunity to network, allow communities to evolve and give space to like-minded professionals to come together. “Our clients have the freedom to rent 20 seats and increase the number next month to 40 or reduce it to 10. Business is dynamic so this space allows entrepreneurs to reduce or expand at will,” says Mishu Ahluwalia, founder, and CEO, GoHive, a co-working space on Golf Course Road.

Ahluwalia also says that given the changing dynamics and demands of office space occupiers, co-working operators are designing space as per the needs of the clients. The space on offer includes a mix of private offices/cubicles, fixed seats, flexible seats and even full-scale customised centres for a specific client.

The spaces on offer include a mix of private offices/ cubicles, fixed or flexible seats, and even full-scale customised centres for specific clients. (Yogendra Kumar/HT PHOTO)
The spaces on offer include a mix of private offices/ cubicles, fixed or flexible seats, and even full-scale customised centres for specific clients. (Yogendra Kumar/HT PHOTO)

The monthly rentals of these seats vary from 5,500 per seat per month in Udyog Vihar to 15,000 to 18,000 on Golf Course Extension Road and upward to 30,000 at Cyber Hub. “The price depends upon various factors such as the facilities and location,” he says.

Operators say that the primary benefits associated with co-working spaces are that operational cost is lower, infrastructure is better and there are shared communities, which lead to business opportunities.

Samantak Das, chief economist and head of research, JLL India, says, “The shift in perception among millennials to ‘share’ instead of ‘own’ has made this concept popular. For all groups—corporate occupiers, start-ups, entrepreneurs and millennials—renting offers flexibility and savings. Co-working offers cost savings of 20%-25% compared to traditional office space leasing.”

Garg from Garage Society says that for clients in Udyog Vihar, which are start-ups and small and medium enterprises, the key factor is cost and infrastructure, such as assurance of the Internet and air-conditioning. However, for larger corporates, the location, the distance of commute and quality of office is also as important as infrastructure.

Sanjay Choudhary, founder, IncusSpaze, a flexible space operator, which has a presence in Gurugram and tier 2 cities, says that their centres in Lucknow and Indore are being rented out by local businessmen and large corporates, which want to have a small presence there, but don’t want to set up company-owned offices there.

Kritika Gupta, manager, IncusSpaze, says that growth in tier 2 cities is good as the price of real estate is less, resources are cheaper and the cost of operations is reasonable. “The people now understand the working model and are coming to us,” she says, adding that their centres in Gurugram have given them a clear understanding as to what the client wants and how to satisfy the demand.

A major outcome of the growth witnessed by the flexible working space segment is that several new operators and even traditional real estate companies have decided to dip their toe in the waters. (Yogendra Kumar/HT PHOTO)
A major outcome of the growth witnessed by the flexible working space segment is that several new operators and even traditional real estate companies have decided to dip their toe in the waters. (Yogendra Kumar/HT PHOTO)

Industry experts admit that despite start-ups giving the initial spurt to flexible office space, it is surprisingly the corporates that are now contributing to the major chunk of demand across various cities.

“More than 90% of our clientele is large enterprises. The growth of agile workspaces is fuelled by multi-sectoral growth, and we have a diversified client base comprising growing sectors like IT, healthcare, manufacturing, financial services, automotive, logistics, and other sectors,” says Neetish Sarda, founder, Smartworks

Mudita Dhankhar, an architect of flexible spaces, says that corporates want to station their workers in newer markets at lesser costs. They also want their employees to experience a flexible work environment as the majority of the workforce comprises of millennials, she adds.

“The primary requirement of flexible spaces is that they should be generic but flexible to change in short periods so that clients don’t get bored. The colour scheme should be vibrant, lighting is important and people should not get the Monday morning blues while coming to office,” she says. The spaces she has designed in Gurugram allow for community spaces, the furniture is ergonomic and user-friendly, and every element has a local touch.

A major outcome of the growth witnessed by the flexible working space segment is that several new operators and even traditional real estate companies have decided to dip their toe in the waters.

While the flexible office space is looking for growth and more share in the office rental market, experts say that there are multiple challenges as well. Due to the entry of large corporates who have taken up shared spaces, experts say concerns regarding data security and privacy remain, as some of these companies deal with a high volume of confidential data and for them sharing space with external organisations remains a challenge. Some of the larger companies are also concerned about the dilution of branding and their own corporate culture, say experts. Another issue is that some land and property owners are slow to understand the co-working business model; however, most Gurugram operators say times are changing.

A majority of experts and operators say that due to technology, business strategies and operations management of firms have undergone a paradigm shift and this is the reason that flexible workspaces are needed for workers operating in a changing environment.

Anshuman Magazine, chairman and CEO, CBRE, India and south-east Asia says “Many enterprises are increasingly adopting the start-up entrepreneurial culture, such as cost-effectively securing the best talent, sharing office spaces, strengthening balance sheets by reducing the overall operational costs and adding agility in real estate portfolios. There is an increasing emphasis on retaining talent by allowing a work-life balance by reducing commute times, for instance.”

SHARE THIS ARTICLE ON
  • ABOUT THE AUTHOR

    Abhishek Behl is principal correspondent, Hindustan Times in Gurgaon Bureau. He covers infrastructure, planning and civic agencies in the city. He has been covering Gurgaon as correspondent for the last 10 years, and has written extensively on the city.

Close Story
QUICKREADS

Less time to read?

Try Quickreads

  • As the city reels under heatwave, volunteers at Earth Saviours Foundation are ensuring residents in their shelters stay hydrated.

    Acts of kindness help less privileged face harsh summer

    Some good Samaritans have stepped up to help those in need by distributing food, water and other essentials. Shailee Mayur Shah, who runs a Facebook page, Smile Collectors says: “Whenever I step out of my home (Phase 5, Gurugram), I keep water bottles in my car and distribute them among those working on construction projects, digging or laying roads, and also manual rikshaw drivers and delivery agents.” Also doing their bit for autorickshaw drivers is Roti Bank, which is distributing towels.

  • The tragic incident occurred at around 9.40 pm when the victim touched the metal part of the bus shelter ( Representational image).

    Bengaluru: Man electrocuted at Hebbal bus stop by ‘illegal’ ad panel

    A 30-year-old man died of electrocution near the Hebbal bus stand on Saturday night after he accidentally came in contact with the live electric wire. It was reported that the man came in contact with a live electric wire, illegally drawn by a private advertisement company to light up an advertisement panel at the bus shelter. The victim's body has been shifted to Dr BR Ambedkar Medical College Hospital, said Police officials.

  • Representational Image (Pexels) 

    How Bengaluru Police tracked down a man who stole a car via an OLX ad

    In a bizarre case, Bengaluru Police tracked down a 36-year-old who had stolen a car on the pretext of taking it for a test drive. MG Venkatesh Naik (36) from Amruthanagar in the city and Bagegpalli in Chakkaballapura district met Ravindra Elluri (47), a resident of the Coffee Board Layout and an engineer on January 30. I turned out that Naik who met Elluri at 7PM was using a stolen phone. Naik confessed to the crime.

  • Delhi BJP chief Adesh Gupta.

    BJP kicks off drive to ‘expose AAP model of development’ in Delhi

    Delhi BJP president Adesh Gupta kickstarted the party's 'Pol Khol campaign' against the AAP government in Delhi on Sunday from the Rajinder Nagar assembly constituency, where a bypoll is due to be held. Gupta said, “This is to expose Delhi CM Arvind Kejriwal...failure to deliver on promises in the past seven years.” Despite repeated communication, AAP couldn't be reached for comments.

  • (Picture for representation)

    81-yr-old man held for ‘digital rape’ of minor in Noida

    An 81-year-old man was arrested by Gautam Budh Nagar Police on Sunday for alleged 'digital rape' with a minor over seven years. Police said the suspect was living with the 17-year-old victim as her guardian. Police said the man, an artist by profession, had an office in Himachal Pradesh and one of his workers sent his minor daughter to live with him, so that she could get an education.

SHARE
Story Saved
×
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Monday, May 16, 2022