Mumbai: Shopping malls, particularly underperforming ones, are becoming a favourite destination for setting up shared office spaces. Cheaper rentals, availability of large spaces and easier access to recreational facilities in shopping complexes are luring co-working office providers to malls. For co-working office providers such as Awfis Space Solutions Ltd, IWG Plc, The Hive and SmartWorks, shopping complexes provide one of the fastest and efficient ways to open co-working offices.
Apart from getting attractive deals, such retail destinations offer the right setting for an informal environment, a theme most co-working spaces thrive on, said executives of these companies.
Shared office provider SmartWorks Ltd is in the process of converting Pune’s Central Mall, which has been shut for the past two years, into a co-working office.
Nitesh Sarda, founder, SmartWorks, said the company is currently in talks with more than 20 landlords of the 120,000 sq. ft shopping complex to convert it into a co-working office.
He expects to start work on the complex in two-three months.
“Firstly, malls are now open to the idea of converting into a commercial space. There are a lot of collaborative areas that are designed in a mall which is quite attractive. Location is a big factor and some of the older malls are located right in the residential pocket," said Sarda.
Awfis Space Solutions has opened co-working offices at five shopping malls in Mumbai, Pune and Gurugram.
The firm has chosen malls where footfalls have significantly dropped in 2-3 years or are under-utilized areas in a shopping complex to open shared office spaces.
For instance, Awfis operates a 30,000 sq. ft co-working office on the sixth floor of Ambience mall at Gurugram. Besides, it has also opened centres each in Raghuleela and Heera Panna mall in Mumbai and Nucleus mall in Pune.
According to Sumit Lakhani, chief marketing officer, Awfis, the higher floors of mall which are less popular among retailers provide an attractive deal to set up such shared offices.
“The rental difference between ground floor and higher floors is 35-40%. Access to parking spaces and security system are also well taken care off. Besides, most malls are generally located in some of the best locations around," he said.
Luxembourg-based International Workplace Group (IWG) operates four Regus business centres out of shopping complexes in Delhi, Noida, Bengaluru and Chennai.
It has also recently opened a co-working office under the brand SPACES at City Centre mall in Chennai.
“Co-working is still looked at as an informal work space. Several firms may not like to associate with a mall as a workplace but for a co-working office, malls provide the right setting. Abundant parking spaces, along with a good amount of food and beverage areas within a mall, becomes a good fit for setting up co-working offices," said Harsh Lambah, country manager (India), IWG.
For developers, leasing out to such office providers allows them to utilize areas in a shopping mall that are less popular among retailers. “A mall makes a whole lot of sense for co-working office providers. They don’t have to invest anything on food, entertainment and other facilities. Besides, for malls, it provides captive customer inside a mall," said Pankaj Renjhen, chief operating officer, Virtuous Retail, part of private equity firm Xander Group.
Xander’s co-working office venture, The Hive, operates two centres at its two VR malls in Bengaluru and Chennai.