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Why India’s Coworking Market Is The One To Watch In 2019

by Cecilia Amador de San José
December 28, 2018
in Business
Reading Time: 4 mins read
A A
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In 2018 coworking reached 10% of the Indian office leasing market.

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  • Coworking spaces are mushrooming and finding increased space in the traditional occupier mix of Indian office markets.
  • According to JLL, there are 350 operators operating 500 locations across India, and the vast majority launched within the last 12 to 18 months.
  • Last year the share of coworking spaces in terms of office leasing reached 4% by the third quarter, while 2018 hit a new high of 10%.

In November of last year we turned our sights to India and argued that it could be the hottest coworking growth market in the world. JLL India recently published the report “Emerging Trends in India’s Office Sector”, which found that coworking has changed the face of India’s office sector and that coworking take up tripled during 2018.

A comparison of the cumulative coworking space take-up across the top 7 Indian cities found that: “while in the first nine months of 2017 the space take up was 1.11 million sq ft, it increased more than three times to 3.44 million sq ft during the first nine months of 2018.”

Additionally, the share of coworking spaces in terms of office leasing reached 10% by the third quarter of 2018. In 2017 it was recorded to be at 4% by the end of the same quarter.

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JLL found that there are approximately 350 coworking operators operating an estimated 500 locations across the country. What’s impressive is that approximately 80%-90% of these coworking spaces started their operations during the last 12 to 18 months.

Closely Following Global Trends

According to the report, “coworking spaces are mushrooming and finding increased space in the traditional occupier mix of Indian office markets.” Though India’s coworking market took off later than that of the US, UK and Europe, it seems to have caught up to current trends.

The propagation of these spaces has been driven to a certain extent by an “enhanced focus towards employee well-being and retention”, which according to the report is “propelling the setting up of new standards in the design and aesthetics of office spaces.” It’s also been driven by a “shift in workforce dynamics that has encouraged enterprises to rethink their workplace strategy in terms of delivering a solution with a high degree of agility and flexibility.”

Approximately 40-45% of the business opportunity for coworking operators in India lies with mainstream corporate firms or large enterprises. For most corporate occupiers in the country, coworking has become a business solution, not just a real estate alternative.

Suggested reading: “Fortune 500: Are the Big Corporates Taking Over?”

Both of these trends are very well-aligned with what the industry is observing on a global scale. This year, Workbar became the first ever coworking space to be awarded with the WELL Building certification. According to JLL, “with employee wellness gaining increased importance, WELL Certified Buildings are making their mark on office markets in India.”

Generally speaking, wellness has become a key element of the workplace experience.

India’s flexible workspace sector has also caught up to the trend of coworking in malls. A JLL Retail survey across 12 mall developers in India found that “almost all of them are planning to incorporate shared or collaborative spaces in the future.”

As with other global markets, it seems competition has intensified in India and it has led to increased M&A and joint venture activity.

“AltF CoWorking acquired Daftar India to expand in Delhi NCR; international shared workspace company WeWork forayed into India in partnership with Indian real estate developer Embassy Group, leveraging the combination of best in class technology and real estate expertise; and prominent developer RMZ Corp launched its own coworking arm CoWrks.”

The latter of these examples, CoWrks, hints to another trend: property and land owners venturing into operating and running their own flexible workspace brands.

Coworking in India: Top Markets

Mumbai, Bengaluru, and Delhi-NCR experienced a marked increase in their proportion of coworking space to their total office leasing. During the first nine months of 2018, Mumbai recorded the highest proportion; 21% of total office leasing in the city was in the coworking sector.

“The concentration of co-working spaces is likely to intensify further in cities such as Bengaluru, Mumbai and Gurgaon, due to the available infrastructure and presence of numerous start-ups. Hyderabad, backed by pro-active state policies and home to IT and e-commerce giants, is likely to witness fast-paced growth in the sector, since both these factors would help create further opportunities for start-ups and SMEs.”

Indian coworking operator, Awfis, plans to expand to Chennai and Tier-II cities like Jaipur, Ahmedabad, Bhubaneshwar, Kochi, and Indore. It also aims to run 100 shared workspace locations by June or July of 2019.

WeWork entered the Indian market in July of 2018. Since then it has expanded to 12 locations in three cities: Mumbai, Delhi, and Bengaluru. According to JLL, the coworking giant hopes to expand to emerging cities in 2019, including Pune, Hyderabad, and Chennai.

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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces. If you'd like Ceci to check out your workspace, feel free to reach out to her at [email protected] (and send a plane ticket).

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