As pandemic stretches on, companies look at co-working spaces, avoid commitments

As pandemic stretches on, companies look at co-working spaces, avoid commitments

If you thought business centers and co-working spaces are for the bootstrapped in the tech space, you may be far off the mark. Companies like 3M and Starbucks have moved their Indian HQ to co-working locations, pointing to how the pandemic is shaping working models – for not only employees but also employers.

Given the uncertainty in the business environment, companies are looking to optimise costs and achieve better employee engagement in current circumstances.

So, they are not committing huge capital expenditure to real estate, opting instead for co-working office space that allows them flexibility on investment commitment.

Welspun One, DevRev, Man Trucks & Bus and Mogli Labs are some other companies that have moved their bases to co-working spaces.

“Flexi spaces offer corporates the flexibility to expand or contract their space in a volatile economic environment and also save space with regards to common amenities”, said Ramesh Nair, Chief Executive Officer (CEO), India & Managing Director, Market Development, Asia, at Colliers.

Colliers itself has also set up one of its key offices in India at a WeWork co-working hub at Two Horizon Center in Gurgaon.

3M, the India subsidiary of a global firm, has signed a two-year deal with WeWork that will provide the company’s 400 employees an option to work out of any WeWork locations.

“In the current scenario where businesses are reassessing cost economics and making their businesses more agile, flexible options have emerged as the workspaces of choice for all businesses, especially enterprises,” said Santosh Martin, Chief Revenue Officer, WeWork.

Welspun One has inked a deal with Dextrus co-working space at the Peninsula Corporate Park in Lower Parel.

“We get to enjoy the environment of a shared workspace alongside our personal workspace all while being part of a larger community,” said Anshul Singhal, Managing Director, Welspun One Logistics Parks said.

Traditionally, flexible/coworking spaces have been popular with start-ups. However with uncertainties around the spread of the pandemic large corporations are also looking at getting out of long-term leases and owned premises to flexible coworking workspaces.

“We explored various options from on-demand coworking spaces to taking up our own space in an office building. While our team is small at the moment, we’re growing fast – and flexibility to grow our team in the same space was extremely important to us” said DeRev in an email response.

The firm has set up its headquarters in a co-working space in Bangalore.

Most companies are also going back to the drawing board to figure what percentage of the workforce is better off working remotely and the segment that needs to work from the office. Depending on the nature of the business, companies are coming up with different models.

“Earlier coworking was not an option for companies but now with many leases getting expired demand is returning. Around 85% of our demand is coming from replacement of office space and ready to move in spaces,” said Kunal Walia, managing director, Simpliwork, in which Salarpuria Sattva has a stake.

The co-working and managed office market has disrupted the traditional work environment and has seen a massive growth in the last few years.

“Due to several trends accelerated by the pandemic – de-consolidation of office spaces, new office spaces in new markets, work near home, the demand for managed and flex spaces has increased significantly. It’s financially unwise for enterprises to maintain large office spaces for longer leases as they continue to adapt to the fluid nature of work, ” said Neetish Sarda-Founder, Smartworks

As per, Colliers International, during 2021, flexible workspace operators are likely to lease about 3 million square feet of space across the top six Indian cities.

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