Coworking sector resilient
Hyderabad to have an overall leasing stock of 7 mn sq ft by 2021, forecasts Savills India
Hyderabad is seeing consistent growth in the coworking space, attracting all the major global and national operators. Last three-year data suggests leasing by coworking operators in the city has grown year-on-year by significantly increasing the overall stock, placing Hyderabad among the top markets as well as making it one of the fastest-growing markets in the country.
Looking at the data shared by Savills India exclusively with Telangana Today, Hyderabad which had 1.9 million sq ft of coworking stock in 2017, saw an addition of 0.7 million sq ft in 2018 taking the stock to 2.6 million sq ft. With an aggressive leasing of an additional 2.1 million sq ft in 2019, the year saw the lease stock jump to 4.7 million sq ft.
Despite the onset of pandemic and the subsequent lockdown this year, the Hyderabad coworking segment showed resilience, with Savills estimating additional leasing of 1.1 million sq ft to take the overall stock to 5.8 million sq ft in 2020.
Showing recovery from 2020 impact, the city, Savills forecasts is likely to add 1.2 million sq ft of coworking leasing in 2021, bringing the stock to 7 million sq ft by the end of next year.
Arvind Nandan, managing director, Research and Consulting, Savills India said, “Over the years, shared office space has emerged as a separate asset class bringing significant cost advantages to occupiers. A wide rate spectrum combined with hassle-free operational services on offer, have been instrumental in increasing the affinity of mid-sized firms as well as large corporations towards coworking spaces.”
The pandemic could possibly lead to an array of trends in the coworking segment including the rise of marketplace platforms with sectoral expertise in flex spaces and increased consolidation with large investor- backed operators overcoming the crisis successfully, he added.
Work-From-Anywhere (WFA) trend is likely to stay in the near to medium term. Hence, organisations are likely to switch to a hub and spoke model.
India outlook
Pan-India leasing by coworking operators is expected to increase by 42 per cent next year at 4.9 million sq ft over 2020 with shared offices likely to gain greater significance in the post- Covid world.
“Coworking operators are also expected to tap into the residential and retail market offering an integration of retail centres and office spaces,” said Nandan.
In 2020, coworking companies are expected to lease around 3.4 million sq ft. accounting for 11 per cent share of the total office leasing market. Although the overall leasing activity is expected to reduce significantly in 2020 as compared to 2019, it is expected to increase steadily over the next two years.
The share of coworking space take-up in overall office leasing activity is poised to rebound to a 15 per cent share in 2021, similar to the 2019 level. Coworking in India has grown from having a 5 per cent share in 2016-17 to about 15 per cent in 2019.
As per Savills research, over 3,000 coworking centres across India are likely to offer about 1 million desks by 2022. Additionally, leasing activity by the coworking segment is expected to grow by 29 per cent during 2015-2022.
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