Co-working spaces are spreading to non-metro cities, wooing start-ups in towns
As entrepreneurship catches on, factors like availability of land and low-cost lease rates are contributing to the growth of this realty segment.Updated: Dec 03, 2018 19:53 IST
Last August, Gorakhpur got its first co-working space, StartUp Café. When Arunn Guptaa, 30, launched it, he had to start from scratch — the concept didn’t really exist in all of eastern Uttar Pradesh.
“Many weren’t aware of the term. So I made animation video tutorials explaining it and posted them on social media, WhatsApp groups and took out advertisements in local newspapers,” says Guptaa, a graduate in business studies who has previously worked with major e-commerce platforms.
Now, 50 people — start-ups and freelancers — work out of the 2,500-sq-ft space.
Awfis, which has made its mark with multiple spaces in the metros, launched an outpost in Chandigarh earlier this month. They already have centres in Hyderabad and Pune. Within three months, they plan to foray into Ahmedabad and after that, non-metros like Jaipur, Bhubaneswar, Kochi and Indore.
Elsewhere, young entrepreneurs are launching co-working spaces in cities like Surat, Rajkot, Udaipur and Panaji. They’re offering additional services like GST registration, incorporating local elements in designs and layout, and organising networking events to boost the local start-up ecosystem.
LESS IS MORE
According to a research report for 2017-18 by real-estate services firm JLL, there are approximately 350 co-working players / service providers operating an estimated 500 shared workspaces across the country, compared to less than 30 centres in 2010.
The bulk of this segment is restricted to seven cities - Mumbai, Delhi/NCR, Bengaluru, Chennai, Pune, Hyderabad and Kolkata. But smaller markets like Jaipur, Chandigarh, Ahmedabad and Kochi are expected to see a boom in this segment, the research suggests.
“The entrepreneurial spirit in the smaller cities has exponentially increased their potential to be up-and-coming hubs of co-working spaces,” says Amit Ramani, CEO and founder of Awfis.
Akshit Mehta, founder of Vorq Space that has two co-working centres in Mumbai, agrees. “A NASSCOM report says that India is expected to have as many as 11,000 start-ups in the tech domain alone by 2020, of which a significant number will be based in non-metro cities,” he says.
Responding to this potential, Mehta has chalked out a plan to penetrate non-metros markets. “By 2020, we want to open 10 more co-working spaces. The focus locations in the first phase are Arpora in Goa, Surat, Nashik and Puducherry.”
Availability of space, high-speed internet and more importantly, low-cost leases, are also encouraging entrepreneurs to focus on non-metros. “Government initiatives like the smart cities mission have enhanced real-estate growth in these regions, making it easier to provide Grade A workspaces at affordable prices,” Ramani says.
YES AND NO
Based on the non-metro markets they’re in, the spaces also feature local elements in their design. At 91Springboard in Panaji, vibrant murals sport anchors and lighthouses.
“Cultural sensibility also plays an important role,” says Ramani.
Launching a co-working space in a non-metro has its risks and challenges, though. The first is familiarising locals with the concept. “Explaining the benefits was a big challenge initially,” says Abhinandan Gupta, 28, founder and CEO of Adited, which launched its first space in Indore, a 34-seater, in November 2015 and now has three spaces in that city. “For the first three months, we had just two small IT companies working with us. So we started focusing more on networking events, which helped us build good reach. We reached 100% occupancy at our first branch in about six months.”
Once they understand it, the formula offers a win-win for the growing number of entrepreneurs in non-metro cities — they get office space without the hassle of running it themselves, maintaining it or even decorating; plus, they can network with other entrepreneurs at no extra cost. Interior designer Anubhav Suri has been working out of a co-working space with a team of three members in a dedicated cabin at StartUp Café in Gorakhpur for five months. “The monthly rental for a 200-sq-ft office space would be Rs 20,000. I’d have to spend additionally on infrastructure and amenities. Here, I can rent a fully-equipped cabin for Rs 5,000 per month,” he says.