Many corporates are looking to lease shorter term office space
Co-working companies are seeing a revival in interest after a pandemic-hit year as some companies — mostly small and medium enterprises — slowly bring some employees back to office.
Occupancies in the first two months this year have been about 80% of the year-ago period, while average occupancy is about 50%. “On a month-on-month basis, we have been adding 4-5% in occupancies since September and currently we are at 67% compared to about 90% last year. During the peak of the pandemic, we were down to about 50% and we expect it to go up to 75% by April,” said Amit Ramani, founder and CEO of Awfis.
Buoyed by the demand from corporates, many of whom may not be keen to enter traditional long-term leases of 3-5 years, co-working companies are also looking to increase the number of seats. For example, Awfis is looking to add 24,000 seats by the end of December.
Karan Virwani, CEO of WeWork India, says that in this volatile business environment, companies are looking at greater flexibility, which is a key driver on how they choose their workplace for the future. “This is not just commitment in terms of tenure but also access to offices and ability to get workspace on demand.”
WeWork started a new product to attract more enterprises — companies can pay up to Rs 10,000 per month to get an access card that can be distributed among employees who can use it to enter any WeWork office across the country and work seven days a week. Current occupancies are up to 38% from just 5% last year.
Virwani added that demand in the current quarter has been similar to the one last year and expects to end at higher numbers. “Demand has increased from large occupiers as well like Commonwealth Bank, OnePlus. Many companies, whose leases ended during lockdown, chose not to renew but come to us. Even Ola used us for interim office space,” he added.
Gurugram-based 91Springboard says it has seen small and medium companies, with less than 50 employees, making a faster return every week. While occupancies in January were 70-75% of pre-Covid levels, this month it is 85-90%.
Harsh Lambah, country manager India at IWG said his company is seeing larger work space requirements from bigger companies who want to realign their real estate portfolio. “Large enquiries are across multiple centres across cities and we are aggressively looking to open new centres.”