The commercial real estate industry has had an eventful 2017 with co-working ushering in a new culture of collaboration in the workspace. Flexibility, cost saving and ease of starting an office are some of the most important factors contributing to the exponential growth of co-working spaces. Entrepreneurs, as well as established companies, are known to have saved between 20-30 percent of the costs by opting for a co-working space over a traditional office setup.
This year has witnessed a massive uptick in the growth of the co-working industry to the tune of 40-50 percent. From just 80 in 2016, the number of such spaces has jumped to a whopping 400 percent to 350 this year. Given this spectacular growth, private equity (PE) firms are betting big on this segment.
Earlier this year, Awfis, one of the country’s largest co-working space providers raised $20 million (Rs130 crore) from Sequoia Capital. Another big name in this space, Smartworks, is also in talks with PE funds for raising capital to fuel expansion. The company is looking at raising Rs100 crore plus apart from leveraging the expertise brought by PE funds.
Domestic players such as Awfis and Smartworks account for a large share of the co-working space market in the country. But international names are also entering this promising segment and offering stiff competition. WeWork, the US-based shared office space behemoth recently forayed into the Indian market and signed an agreement with the Embassy Group to develop a co-working facility in Bengaluru with an investment of $100 million.