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Coworking segment fails to entice large MNCs in India despite lower rentals
Pune offers the maximum cost advantage, while Gurugram in NCR (national capital region) offers the least.
Even though coworking spaces is resulting in rental savings between 6 per cent and 33 per cent, the segment has failed to attract major multinational companies (MNCs) in India. This is in sharp contrast to its popularity in several European nations, a report by ANAROCK Consultants stated.
Pune offers the maximum cost advantage, while Gurugram in NCR (national capital region) offers the least. Individually, flexible workspaces in Pune offer the highest rental difference of as much as 33 per cent as against comparable spaces in traditional offices, while Gurugram offers 6 per cent.
“While startups and budding entrepreneurs make a beeline to co-working spaces, large corporates remain wary of depending on them for their expansion. This trend is quite contrary to what is witnessed in developed European nations,” Chairman of ANAROCK Property Consultants Anuj Puri said.
As per the ANAROCK report on the emerging asset classes, the average monthly rental for coworking spaces in Pune’s CBD areas such as Laxmi Road, Camp Road, Bund Garden, Koregaon Park, and Shivaji Nagar hover somewhere between Rs 5,000 - Rs 10,000 per desk as compared to Rs 10,000 - Rs 12,500 per desk in traditional office spaces.
Despite all the pros of co-working spaces, they are not devoid of cons. There are many which do not have separate canteens or pantries for occupiers, and also restrict corporates from organising events in common areas. Maintenance of these properties is also a big challenge, the report said.
Though there are some big companies that do use coworking spaces, these limitations have generally put large companies “off the notion of embracing coworking spaces despite the lower rents,” Puri said.
As per the report, coworking spaces in Bengaluru charge nearly 20 per cent lower rentals in key areas like MG Road, Millers Road, Vittal Mallya Road, Residency Road. The average monthly rental for flexible workspaces hover between Rs 7,500 – Rs 15,000 per desk, while rents for traditional office spaces remains somewhere between Rs 10,000 - 18,000 per desk.
Speaking about Mumbai Metropolitan Region (MMR), the report said coworking spaces in the region come at 14 per cent lower rentals in key micro-markets such as Ballard Estate, Colaba, Churchgate, Fort and Nariman Point. As for the average monthly rentals in coworking spaces, it is somewhere between Rs 18,500 - Rs 28,500 per desk, while for traditional office spaces it ranges between Rs 24,500 - Rs 30,000 per desk.
The rentals for coworking spaces in CBD areas of Chennai and Hyderabad are 9 per cent lower respectively. In Chennai’s key areas like Anna Salai, Nungambakkam and RK Salai the average monthly rentals for flexible workspaces are somewhere between Rs 6,000 - Rs 14,000 per desk as compared to Rs 7,000 - Rs 15,000 per desk for regular office spaces.
In Hyderabad, co-working rentals in key commercial or office areas such as Gachibowli, Madhapur, Manikonda and Kondapur range between Rs 5,000 - Rs 8,000 per desk, as against Rs 6,000 - Rs 9,000 per desk in traditional office spaces.
Closer to the capital, in Gurugram, flexible workspaces command only 6 per cent lower monthly rentals of Rs 9,000 - Rs 14,000 per desk, against Rs 9,500 - Rs 15,000 per desk in regular office spaces.
The report said that a major factor keeping the price difference between the two low in Gurugram is the huge demand for coworking spaces by the start-ups and entrepreneurs in the CBD areas of the city.
Gurugram is considered to be one of the major co-working hubs in the country. Also, keeping in mind the huge demand for commercial spaces in city, supply for Grade A commercial office spaces is low, the report concluded.
