Has India’s coworking industry reached to a boiling point?

India’s coworking industry has changed the shape of its real estate sector over the past few years, but is the bubble about to burst?

India currently has an estimated 400 shared workspaces ran by about 200 operators, supported by the growth of India’s entrepreneurship culture and big companies who want to reduce business costs. Here are a few predictions for the future of coworking in India.

First, supply is expected to exceed demand. The market is currently saturated with a variety of competitors. Major operators such as WeWork and Awfis are quickly burning through cash, which is leading many small firms to merge with bigger providers or leaving the market altogether.

Overall, the number of coworking spaces may tumble from its current standing as many smaller players will not be able to survive without the aid of investors.

Another prediction is that more operators will gear their efforts towards Tier 2 and Tier 3 cities. Currently, Bengaluru, Mumbai and NCR have about 75% share of coworking spaces in the country, but that is expected to change in the future.

While many property owners have entered the coworking market and some firms have entered into revenue sharing deals with landlords, this model may not be sustainable in the long run. With demand not matching supply, revenue sharing models might generate lower returns.

Although coworking has made a permanent mark in India, there will most likely be many changes on the supply side.