Bengaluru: After its first successful operational project in Bengaluru, The Hive, a co-working space venture backed by global investment firm The Xander Group Inc., is planning to scale up and go pan-India.
Its second co-working centre of around 50,000 sq. ft in Chennai is scheduled to open later this year. It is also planning to announce more centres of 50,000-100,000 sq. ft in Mumbai and Delhi shortly.
Xander’s relatively new venture is part of the booming collaborative workspace business in India. The sector attracted both domestic and foreign investor interest in the last year, and rides on the commercial office real estate success story.
“The idea is to provide large, integrated work ecosystems and we look at it as an operational and service-oriented business. It is a long-term play for us and there are many opportunities to expand," said Ankit Samdariya, CEO, The Hive.
The Hive runs a 100,000 sq. ft centre in VR Bengaluru mall, which is operated by Virtuous Retail (VR), the retail development arm of Xander. Samdariya said another 20,000 sq. ft will be added to this centre.
Co-working centres or shared workspaces have emerged as a new occupier category, taking up large spaces similar to what many technology companies did during the e-commerce wave of 2014–15 in Bengaluru, a January report from property advisory Knight Frank said.
They offer new commercial tenancy models and encourage start-ups and small and medium enterprises (SME) to work from these centres.
The Knight Frank report describes the steady expansion of new age businesses such as co-working space providers as one of the defining stories of 2017.
Across the top seven cities, co-working space providers took up around 1.3 million sq. ft of office space between July-December, 2017.
WeWork India, part of US-based co-working office space provider WeWork, which received $4.4 billion funding from Japan’s SoftBank Group Corp. in 2017, has plans to open multiple centres this year. It has four centres in Bengaluru and Mumbai with 7,000 desks, and plans to take that to 10,000 desks with two more centres—in Gurgaon and Marol, Mumbai—opening soon. It has two more centres—a 900-desk centre in Bengaluru and a 1500-desk centre in Mumbai—in the pipeline.
“We are trying to do a new building (centre) every month. It’s been simply exciting with huge demand for such space that enables to fill up a centre in 4-6 months," said Karan Virwani, general manager, WeWork India.
Awfis Space Solutions, that opened its first co-working facility in Delhi in 2015 and raised $20 million from Sequoia Capital India in 2017, operates 14,000 desks or seats across 36 centres across cities. By March, we will be 51 centres with 19,000 seats across nine cities.
“Everyone thought co-working centres are for start-ups and that constrains the reach one can have. But we are solving a larger problem of finding quality workspace and the focus was always on how to bring a traditional office-goer to a workplace," said CEO Amit Ramani.
Alongside, Xander has been expanding its residential and office investments in India.
“...We have some large portfolios in our acquisition pipeline, and if the diligence (process) comes back as per expectations we are likely to double the size of our office portfolio from the current 6 million sq ft to approximately 12 million sq ft," said Rohan Sikri, senior partner, Xander Investment Management Pte Ltd, the real estate private equity arm of The Xander Group.