Coworking spaces double in 4 years in India: Report

New Delhi: Coworking spaces are gaining popularity among businesses in India, with demand doubling in the past four years. In Q1 2023, coworking spaces represented a 27% share of the net absorption of 8.2 million sq. ft. across the top seven cities, a significant increase from 14% in Q1 2019.

Bengaluru and the National Capital Region (NCR) accounted for two-thirds of net coworking absorption in Q1 2023, while Pune and Chennai absorbed about 0.52 million sq. ft. of coworking spaces during the same period. The top seven cities experienced a 90% growth in net absorption of coworking spaces, increasing from 1.3 million sq. ft. in Q1 2019 to approximately 2.18 million sq. ft. in Q1 2023.

Post-pandemic, many companies, particularly in the IT/ITeS sectors, are opting for flexible workspaces over traditional offices. The appeal of coworking spaces lies in their varied locations, including residential areas, malls, and hotels, and their cost-effectiveness compared to conventional offices with long lock-in periods.

Low vacancy levels in Grade A offices in cities like Bengaluru, Chennai, and Pune have fueled demand for coworking spaces, while in Delhi NCR, low commercial space vacancy levels have also fostered growth for coworking setups in areas such as Gurugram and Noida.

“Coworking spaces demand weakened considerably after Covid-19 disrupted the workplaces equation across the country. We’re seeing a decisive reversal of this negative trend now, with coworking particularly attractive because of the disrupted IT/ITeS employment scenario,“ said Utkarsh Kawatra, Senior Director - myHQ (ANAROCK Group).

In Q1 2023, southern cities Bengaluru, Hyderabad, and Chennai saw net office absorption of around 4.6 million sq. ft., with coworking players accounting for 26%. Western markets Mumbai Metropolitan Region and Pune had net absorption of approximately 1.48 million sq. ft. of office space, with coworking players contributing 24%. In NCR, coworking players made up 32% of the roughly 1.89 million sq. ft. absorbed office spaces, while in Kolkata, coworking players accounted for 12% of the 0.25 million sq. ft. office space absorbed in Q1 2023..