Coworking and flexible workspaces started off as a hub for startups and entrepreneurs, but corporations now have skin in the game. Reduced costs, wider benefits, working remotely, and the plug-and-play ability are great benefits to companies no matter the size. The simplicity and low cost setups are contributing factors to the massive popularity of coworking spaces, according to a Knight Frank report.
With real estate expected to grow $650 billion by 2025, coworking is expected to expand along with it. Subsequently, mergers, buyouts, and consolidations are bound to increase. For example, coworking operator GoWork plans to raise $200 million during its next funding. Coworking has grown 13% in Q3 office leasing, doubling its growth from the last nine months in 2018 and indicates an even larger growth in 2019.
“Coworking spaces are also looking to transform their operational model, as the leasing cost is expected to go through the roof considering the scarce inventory availability. While high returns are expected in the industry, smarter coworking players are opting for a correct mix of owned and leased properties, as it gives them flexibility in operations, allowing them to cater to specific client needs while strengthening the overall health of the business and economy,” said Sudeep Singh, co-founder of GoWork.
Inventory compared to high demand is causing competition in the coworking sector to become exceptionally strong. This will most likely lead to more mergers and buyouts, according to Singh.
An example of the rapidly growing coworking market is Delhi-based coworking operator Avanta Business Center. Nakul Mathur, managing director of Avanta Business Center said that the nine year old company hopes to open 50 more business centers in next five years.
A relatively fresh face to the coworking game, Smartworks has already accumulated 1.5 million square feet of space in 15 locations across nine cities.
Firms are attempting to fully optimize coworking spaces and use them as a tool to drive community, culture, and corporate productivity.