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BusinessSmartworks sees spike in coworking space demand

Smartworks sees spike in coworking space demand

Published: 23rd Jul 2021 5:41 pm

Hyderabad: Agile managed workspaces provider Smartworks which was operating its first co-working facility at Purva Summit in Hyderabad earlier has begun operations at its second and new facility at Aurobindo Galaxy near Ikea recently, where it is seeing a lot of traction.

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Neetish Sarda, founder, Smartworks, told Telangana Today, “We have 2.3 lakh sq ft of space in the second building and are planning to add more floors as the demand is surging. As the vaccination rate is increasing, we are seeing tangible momentum at our workspaces, as our spaces give clients agility to meet their specific requirements in these Covid times.”

The company has a footprint of over 4.2 million sq ft across 31 locations in nine cities including Hyderabad, Delhi NCR, Kolkata, Bengaluru, Mumbai, Chennai and Pune catering to over 400 organisations across large enterprises, SMEs and high growth startups. JLL study last year placed Smartworks among the largest workspace providers in terms of footprint, with the company accounting for 14 per cent capacity pan-India.

Sarda said the company wants to touch 7 million sq ft and over one lakh seats by the end of this year. In the next 3-4 years, the company is aiming for 20 million sq ft space and over 2.5 lakh seats, from the current level of over 70,000 seats.

“We are creating a huge presence in Hyderabad. We want to strengthen our footprint as we already have about 4-5 lakh sq ft space in the city. The micro markets- HITEC City and financial district are the most promising hubs for coworking space in the city and we will focus on these locations,” he added.

Founded in April 2016, Smartworks has clocked over Rs 100 crore in revenue and has been profitable for an entire year. The company raised about $25 million (about Rs 175 crore) from Singapore’s Keppel Land and may look at further funding post 2023 to meet future needs.

Covid effect

On Covid impact, Sarda said, “Since 90 per cent of our clients are large enterprises with over 200 seat capacity, we did not see much impact in the last 18 months. Very few companies downsized their teams while few clients with less than 50 seats chose to close down operations during the period. But the new client demand led the company to grow at 30 per cent in the last year. We have remained profitable.”

Coworking space sector will see consolidation as the players pass through the pandemic. The current number of 400 players in the sector will soon see a decline. Those who will differentiate their services, draw out right price points, and scale up to multiple cities alone are going to survive in the current market scenario.

Speaking about other trends, he said, since a large number of the IT companies are still looking at work from home, ‘work from anywhere’ is a phenomenon that is going to stay. Companies are looking at how they distribute their offices, as they want their operations to be smooth without impacting their productivity. Many of the technology companies today are engaged in R&D, so productivity remains a high priority.

Market trends

The company is witnessing a high demand from the large enterprises sector for smaller and distributed spaces across tier-2 and tier 3 locations, owing to the flexibility, scale, campus-like infrastructure and mobility. It is also seeing the emergence of hub and spoke models within large cities where clients are seeing multiple workspaces that enable staff to use the facilities near them.

“We will enter several tier-2 cities across pan-India with prefab offices this year, as the inventory requirement is very small. Almost 95 per cent of the inventory demand is still in top 10 cities,” Sarda observed.

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