Co-working space provider Awfis is eyeing expansion into Tier-II towns and consolidating its presence in Tier-I cities.
But it is not just office spaces that the company is planning to tap.
Awfis will also utilise commercial spaces such as shopping malls, hotels and other unconventional asset classes as co-working spaces. Low rentals are one prime reason for the company to explore these alternatives, sources said.
Some of the Tier-II towns it is currently eyeing include Kochi, Jaipur, Bhubaneshwar, Ahmedabad and Indore.
According to Amit Ramani, CEO & Founder, Awfis is planning a 60 per cent increase in seats to 40,000 over the next 10-12 months spread across 100 centres.
Its current capacity stands at 25,000 seats, about 1.5 million sq ft, across 55 centres, which makes it the largest in the country.
“Commercial office spaces apart, we are also looking at idle capacities in unconventional asset classes like a shopping mall or hotel or even educational institutions where co-working spaces can come up,” he told BusinessLine.
Ideally, the company would look at taking up 25,000 sq ft, accommodating 500 seats and other facilities like cafeteria and meeting rooms. Awfis either leases space or opts for a managed aggregator model. Upcoming spaces will mostly focus on the managed aggregator model that includes rent-sharing JVs or management contracts.
“We are in discussions with some of the landlords who own such unconventional assets for conversion,” Ramani said.
Co-working space is expected to be a $2.2-billion market in India by 2022.
Awfis has already established a presence in malls that have seen a dip in footfalls and have under-utilised spaces, such as the top floors. It has set up co-working offices at Ambience Mall in Gurugram, Raghuleela and Heera Panna malls in Mumbai, and Nucleus mall in Pune.
It also has a presence at the Taj Deccan hotel in Hyderabad and at the DERBI Foundation, Dayanand Sagar University in Bengaluru. Approximately, 10 per cent (or 2,500) of its 25,000 seats are located in such unconventional assets.
The co-working space provider reported revenues of₹57 crore in FY18 with 85 per cent coming from primary activities such as seat rentals, meeting room facilities and parking space rentals. The remaining comes from canteen and catering services.
It is expecting a three-fold jump in revenues to ₹170 crore by the end of this fiscal (FY19). The company is expecting to report net profits (at a company level) from October onwards.
“Of the 55-odd centres that we have, 42-47 are profitable,” Ramani said.
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