Co-working is a sizzling trend these days across the major Indian cities. There has been a lot of speculation around the success/ business model of co-working players and the kind of commercial occupiers they may attract. Most of these players want to attract the large corporates other than the non-institutional occupiers, start-ups, and SMEs. BFSI sector has been contributing upwards of 20 to 30 percent of the overall absorption in some major cities like Mumbai, Pune, Bangalore, and Hyderabad, and certainly catching the attention of major co-working players across the country.
While BFSI occupiers have some of the very stringent norms selecting the right real estate owing to the data security, EHS compliances and other technical aspects of an office space, the demand for premium physical and technical infrastructure makes the RE decision for BFSI occupiers even more complex. While a cost effective and collaborative workspaces offered by the co-working operators may look highly lucrative, but it should match the technical parameters laid out by the BFSI occupiers, in addition to the data security and operational privacy.
Large co-working players’ needs to create a niche product offering focused on the BFSI segment and its critical needs at the same time creating a value proposition lucrative for the large BFSI operations suitable under this product offering. Moreover, the density offered by co-working players under this niche product needs to match the space requirements and planning of BFSI players. They also offer customization and built to suit offerings to match occupier demand. Some co-working players have started to offer leaner offering to cost sensitive back offer requirements.
Many co-working providers are very keen to service large BFSI office requirements as dedicated/managed serviced office spaces to potential occupiers owing to longevity of cash flow they can offer. Increased flexibility and integrated operating cost model helps these corporates to avoid high upfront investments and capital expenditures.
India is a rapidly growing real estate market and has a very optimistic future outlook. As we reach closer to become a more organized market we continue to unfold new trends & patterns led by innovations. The rapid growth of co-working industry has reached approximately 13.5 mil sq ft across India and the future of this Industry will depend on how they are able to monetize their current investments going forward.
Authored By: Animesh Tripathi, Director, Office Services (Pune)