Flex space revenue surges as offices become employee-owned

Flexible workspace providers in India report that since the pandemic, India’s flexible workspace providers have reported that Revenues surged multiple times.

Awfis Space Solutions, a publicly traded coworking space provider, has seen its operating revenue increase nearly fourfold. $1.78 billion in FY21, close to $Revenue for fiscal 2024 was Rs 849 crore, according to the company’s IPO filing and annual report. WeWork India revenue more than doubled year-over-year $800 Crore in FY22 $According to the figures revealed by CEO Karan Virwani in separate interviews with CNBC TV18 and PTI, it will reach Rs 1,800 crore in fiscal 2024. Revenues of IndiQube, which is about to IPO, increased by nearly $2.98 billion in FY21 $841 crore in FY24. Mispras Furnishings Private Ltd (Urban Vault) revenue growth comes from $100 million in FY21 $780 million in FY24.

Seek flexibility

“Post-pandemic, businesses want flexibility in spaces such as plug-and-play so that they don’t have to do a complete set-up,” said Pankaj Kapoor, founder and managing director of Liases Foras Real Estate Ratings and Research Pvt Ltd. There is also a shift towards co-working space to expand his office.

“If you don’t need a larger office, or your office is smaller than your requirements, these issues can be solved with flexible space,” Kapoor said. “The cost crisis faced by businesses during the pandemic has also led them to seek more space. More space.” Efficient models like coworking spaces. “

The flexible office sector, which includes co-working and co-working spaces, has “continued to grow” over the past two years, adding 8-9 million square feet (msf) of capacity in 2022 and 2023, according to a Cushman and Wakefield report. Square footage has doubled in the past five years and will account for 58%, or 7-8%, of total Grade A office inventory in the first half of 2024.

Most alternative office space providers have been looking to capitalize on this demand and the booming stock market by going public. Awfis went public on May 30, raising nearly $The IPO raised Rs 600 crore. Smartworks Coworking Spaces Ltd, WeWork India, Simpliwork Offices, IndiQube and Table Space Technologies Pvt Ltd are also gearing up for IPOs, Mint reported earlier.

rising demand

For coworking and managed workplaces, in addition to traditional demand for information technology services and business process management, global competency centers (GCCs) in industries such as manufacturing, engineering and consulting are driving demand, said Ramita Arora, director. Managing Director, Flex India and Bangalore, Cushman and Wakefield.

A Knight Frank report says the GCC will show renewed interest in flexible office space in 2024 as slowing US economic growth prompts companies to take advantage of cost advantages and tap India’s talent pool.

“Before COVID-19, demand usually came from startups, SMEs, mid-sized enterprises and freelancers. Post-pandemic, businesses are seeing a huge rise in demand,” said Amit Ramani, chairman and managing director, Awfis. seize the opportunity to a certain extent. Second, under hybrid work models, employees are beginning to demand to work closer to home. “

This means that the workplace starts to move closer to employees from the moment they go there.

Rishi Das, co-founder, IndiQube, said: “This evolution has led to the emergence of distributed offices, enabling ‘walk-to-work’ in intra-city and inter-city centres. Additionally, the need for agile workspaces has become critical as employees focus on Amid uncertainty about return-to-office plans, zero capital expenditures and pay-as-you-go models take center stage.”

“The growth in commercial real estate and the ‘back to office’ trend have combined to lead to a surge in demand for flexible office space,” said Amal Mishra, founder and CEO of Bengaluru-based managed office space provider Urban Vault.

Expand footprint

Karan said that to cater to this growing demand, Table Space plans to add 9 million sq ft to its portfolio over the next three years, expanding its presence to around 120 locations mainly in tier-1 cities such as Mumbai, Bengaluru and the National Capital Territory of Delhi. a center. Chopra, Vice Chairman and Co-Founder of Table Space. For the current fiscal year, the company’s overall revenue target is $30 billion, an increase of 20-23% over the previous year.

Awfis Space Solutions guidance is approx. $The expenditure for adding 40,000 seats during the current financial year is Rs 140 crore. Urban Vault plan costs $80-85 crore this year, the annual turnover is expected to be $100 crore in FY25.