Mumbai: With a sharp increase in leasing in the shared working space over the last few quarters, co-working is catching up as a preferred asset class for several leading developers and investors, a report by real estate consultancy firm CBRE said.
Flexible working space saw a 277% jump in leasing to nearly 3 million sq ft in the first quarter of calendar 2019, according to the report. On a quarterly basis, it shot up by 70%. Even the size of leasing have increased significantly with several co-working operators shifting focus to taking up medium-to-large sized spaces of as much as 1 lakh sqft, the report said.
Bangalore and the Delhi-National Capital Region (NCR) region were the most preferred markets for flexible space operators in India, accounting for more than half of leasing in the country in the segment during January-March this year, the report showed.
The first quarter also saw some of the big names in the industry including Ascendas Singbridge, Brigade Ltd, and OYO entering the co-working office space market. During the period, OYO signed one of the biggest deals in the co-working segment when it bought out Innov8 for ₹220 crore. As per the report, interest in the segment was also strong from a landlord perspective as is evident by Hyderabad-based developer Meenakshi Group's investment in iKeva to support expansion plans of the co-working startup.
Additionally, two leading players also launched their own flexible space brands – Ascendas-Singbridge with ‘The Bridge’ and Brigade with ‘BuzzWorks’, the report added.
“Given that the Indian flexible space market is one of the biggest across Asia Pacific region, we anticipate that this segment will remain high on the investor radar as well," said Anshuman Magazine, chairman and chief executive officer, India, South East Asia, Middle East and Africa, CBRE.
He said the leasing quantum of this segment is expected to rise to about 10 million sq. ft. by 2020 from about 7.1 million sq. ft. in 2018.
“Technology gave birth to the concept of ‘a liquid workforce’ and flexible space operators are anticipated to embrace it even further for the benefit of their actual customers / end users – employees of the various corporates occupiers," said Ram Chandnani, managing director, (advisory and transaction services India,) CBRE.