How Shared Workspaces gain over Conventional Offices

22 June 2017

How Shared Workspaces gain over Conventional Offices

All offices, whether online or brick and mortar operations, need space to work out from. With improved technology enabling distributed workforces and travel options enabling access to hitherto remote areas of a city, economical office space is not too difficult to find. However, every now and then, the distributed workforce needs to come together and the office in a remote area needs to mark its presence in or near a central business district (CBD). But hiring office space for these infrequent needs is uneconomical.

In CBDs of metros like Mumbai and Delhi, the average rent of grade A office space can be more than Rs250 per sq ft. Add to this the cost of setting up and maintaining the space, and the fact that commercial spaces are usually let out as long-term leases. As a result, prime real estate was considered to be beyond the reach of most start-ups, small business, and even many established professionals.

No more. There are many options to renting office space in a CBD, especially for a small number of people or for short periods. Let’s explore these options a bit more.

 Mint Infographic

Renting options

To cater to emerging businesses, start-ups and professionals, many companies have started offering different types of office spaces such as business centres, or serviced offices, co-working spaces, and even virtual offices. “These office spaces were not very prevalent two years ago but last year the co-working footprint has increased considerably. Currently, more than 160 operators facilitate co-working offices with over 350 operational centres across various Tier I and Tier II cities in India,” said Surabhi Arora, senior associate director, research, Colliers International India. A co-working space is usually an open floor-format office with shared spaces for meetings and networking.

These office spaces try to address the immediate needs of their customers. For instance, if a company organises a meeting only once a month in a city, or has very few employees in a place, or wants to employ some people only for a few months or weeks; they no longer need to get into a long-term lease for these short-term needs.

Mint Infographic1

Just as serviced apartments offer concierge and numerous other services bundled with the apartment’s rent; desks or conference rooms in serviced offices (or business centres) can also be rented along with all the frills—for a higher price—rather than just the co-working spaces,” said Ramesh Nair, chief executive officer and country head, JLL India. While some co-working spaces are as expensive as serviced offices (or business centres), most of the co-working are more cost-effective than the serviced offices, he added.

Apart from the above options, which provide physical space, virtual office space can also be used by home-run businesses and professionals. “They serve those who need mail and call support,” said Sumit Lakhani, chief marketing officer and sales head, Awfis Space Solutions. “Virtual offices are ideal for freelancers or entrepreneurs who spend most of their time travelling. These offices give you the convenience of a registered office address, where you can get your mail delivered and occasionally work from,” said Neetish Sarda, founder and managing director, Smartworks.

The benefits

Cost saving is the biggest benefit of such office spaces (see table). “Companies can save 15-20% by working in a co-working space, which (also) provide…plug-and-play amenities that bring them at par with grade-A offices,” said Nair. These are better suited for those with small teams that need office space in prime areas. “The occupiers of small set-ups, employing 25 to 50 people, can profit from a cost cut of at least 15-30% on capex initially,” said Arora.

The other benefit is flexibility. You can rent these spaces on a monthly, daily or even hourly basis. You could also choose to work out of a cabin space, open space or even a meeting room. “We offer different options. Flexi seat are available at the rate of Rs300 per day per person or Rs. 8,000 to Rs 10,000 per month, or fix seats are available at Rs600 per day or Rs 9,000 to Rs13,000 per month,” said Lakhani. For meeting rooms, his company charges Rs350 an hour for spaces that can seat four, and Rs750 for spaces that can seat eight. The price varies based on location, facilities and amenities, added Lakhani.

For instance, let us assume you have 10 employees and rent a 500 sq ft office at Rs200 per sq ft. It would cost you Rs1 lakh a month. If you opt for a co-working space, it too will cost you about Rs 10,000 per employee. However, while the per month rent may seem to be similar, it does not include the cost of equipping the office. Even if we assume that cost to be Rs 1,000 per sq ft, that is Rs5 lakh upfront you would save with the co-working space. And we have not even factored in the costs of brokerage, lease agreement and the security deposit, and overheads such as the cost of housekeeping, security and other person is also less in case of co-working space. Besides that, co-working spaces offer common receptions, canteen and washrooms, which may be difficult to set up in small offices.

Typically, commercial space are leased out for long-term periods and that need huge amount of security deposits and setting up costs upfront. They also come with lock-in periods. So, if tenants want to vacate at short notice, they would forfeit the security deposit.

“A co-working office space makes more sense if your business is at an early stage, where your team and requirements are limited and you don’t need much privacy to make important business decisions,” said Sarda.

However, before deciding to rent any of these spaces for more than a few days, ask for a trial period. Depending on your duration and terms of lease, negotiate the price. Ask for references from clients. Avoid service providers that don’t have satisfied clients. Evaluate the services that you will require. Do not pay for facilities you don’t need. For instance, if you know that you will rarely use a meeting room or a lounge, do not pay for regular access to it. Enquire about additional and hidden charges such as parking facilities for employees and clients. The office may be shared, but the money you pay for it is completely your own. Make best use of both—your money and the office.

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Co-working operator Awfis mulls launching its IPO towards end of 2023

20 March 2023

Co-working operator Awfis mulls launching its IPO towards end of 2023

  • Posted by Awfis Editorial

With demand for flexible workspace has risen post the second wave of the pandemic, co-working operator Awfis is targeting two-fold jump in revenue to 600 crore in FY23, said founder and CEO Amit Ramani on 7 November.

The firm is also mulling to launch its initial public offer (IPO) towards the end of 2023 mainly to raise funds and give exits to investors, he said, adding the company has so far raised about 450 crore from investors.

Currently, Awfis has 150 centres across 17 cities, comprising about 90,000 desks and offers a desk in a price range of 7,000-20,000 per month.

The co-working segment, which includes managed office space, has been performing exceedingly well in the past 12-15 months, Ramani said.

“Our revenue grew to 280 crore in last financial year from 220 crore in previous fiscal year. This financial year, we are targeting around 600 crore revenue,” he said, highlighting that the firm has already achieved a monthly run rate of 500 crore in revenue.

Asked about the occupancy level, he said the centres that are in operations for more than 6 months have an occupancy of around 85 per cent. On clients profile, Ramani said around 35 per cent of its clients are large enterprises.

Talking about per desk pricing, he said the rate fell during the pandemic but now it is 10-20 per cent up from the pre-COVID level.

The company is partnering with real estate developers and individual landlords, for expansion in an asset-light mode. Though 25 per cent of portfolio is through pure leasing where it has to make capital expenditure. It has partnered with Bengaluru-based Prestige group to open co-working centres at various locations.

Awfis tied up with Blackstone group firm Nucleus Office Parks for a new centre in Mumbai with a seating capacity of 450, earlier this year. On fund raising, Ramani said the company has no such plans but it is planning to launch the IPO by December next year.

“We will start preparation from April onwards and plan to file the Draft Red Herring Prospectus (DRHP) with Sebi by middle of the next year,” he said, but did not share the size of the IPO.

This story appeared in the 7 November, 2022 issue of  Mint and was originally published at: Co-working operator Awfis mulls launching its IPO towards end of 2023

Return to office trend highest among these sectors: What new survey shows

04 August 2022

Return to office trend highest among these sectors: What new survey shows

  • Posted by Awfis Editorial

A new survey has revealed that the return-to-office has gained momentum following the drop in Covid-19 cases as employees from various sectors make their way back to office. According to a survey by Colliers and Awfis, majority of employees in telecom and consulting sectors have returned to office with significant fall in Covid-19 cases, while the IT sector is reportedly lagging as of now.

Notably, the property consultant Colliers India and co-working operator Awfis’ joint report looks into the status of return to work across different sectors, the survey said, “as the third wave of Covid-19 started waning in February, the return-to-office gained momentum. As a result, by June 2022 about 34% of the companies saw about 75-100% of the employees back in office (includes hybrid work).”

Interestingly, nearly 41% of occupiers stated that only up to 25% of their employees have returned to office, with the survey showing that telecom and consulting sectors saw the highest at 75-100% rate of return to office while IT and new technology companies saw the lowest at 0-25% rate of return to office.

Ramesh Nair Colliers India CEO said, “the survey has made it clear that a distributed workspace strategy is the way to go for occupiers in this new era of experiential workplaces, as occupiers emerge from the after-effects of the pandemic. Flex spaces, in particular, are leading this growth, as occupiers from varied sectors are housing teams in flex centres across cities.” Nair further informed that the flexible workspace operators leased about 3.5 million square feet of office space in January-June this year across the top six cities, almost three-fourths of the flexible space leasing in entire 2021.

Amit Ramani, founder and CEO, Awfis said the findings of the survey are a testament to the success of the distributed work model and subsequently of flex spaces in catering to the ever-evolved workspace needs of India Inc. adding that “going forward, 77% occupiers will include flex spaces as part of their workplace strategy. We expect exceptional demand in the future, driven largely by large corporates for de-densification of existing traditional offices.”

Notably, the survey was conducted during May-June among occupiers to understand their strategies regarding distributed workplace. The respondents were from different sectors such as IT/ITeS, BFSI, engineering and manufacturing and others. Total 150 responses were received from C-Suite executives spanning Founders, CEOs, COOs and CHROs of various companies. The company size of the respondents varied, starting from a range of 1-500 employees to companies having over 10,000 employees.

The survey further highlighted that nearly 74% of the occupiers are likely to adopt distributed workspace while 53% of occupiers prefer working from home plus office as their preferred workplace portfolio strategy. About 49% of the occupiers are likely to adopt flex centres to enable distributed workspace, followed by setting up their own offices in metro and non-metro cities, it said.

This story appeared in the 4 August, 2022 issue of Mint and was originally published at: Return to office trend highest among these sectors: What new survey shows 

Co-working operator Awfis aims to double footprint, add more cities

07 February 2022

Co-working operator Awfis aims to double footprint, add more cities

  • Posted by Awfis Editorial

Workspace solutions provider Awfis said it has opened its 100th centre, in Bengaluru, with which it now has 4 million sq ft of office space across the country and 62,000 seats in 14 cities.

The company now plans to double its real estate footprint and add more cities going ahead.

In an ongoing pandemic situation, many organizations are on the lookout for workspace solutions that offer safety, convenience and improve productivity while optimizing costs.
Awfis said it has steadily evolved with the shift in demand, addressing the varied needs of large-scale enterprises, where its centres have been tailor-made to suit the requirements of enterprises.

In line with this, its 100th centre ‘Awfis One’ is located in Lido Mall, Bengaluru and is spread across 70,000 sq ft, with 15,000 seats to cater to the increasing demand for flexible workspaces. “We are elated to reach the phenomenal 100-centre milestone in a span of 6 years. Amidst the dynamic work transition that took place almost overnight, Awfis emerged as the partner of choice in supporting organizations towards reimagining their future of work, through its own business evolution. Over the course of the pandemic, Awfis has grown from being a co-working player to an integrated end-to-end workspace solutions provider that is changing the way India works,” said Amit Ramani, founder and CEO, Awfis.

“Awfis’ rise from 5,800 desks across 20 centres in July 2017 to 62,000+ desks across 100 centers in 14 cities and has also reaffirmed its role as a preferred partner for building future-ready offices in the new normal. We are optimistic about the growth of the flex workspace industry this year and in line with that our aim is to double our capacity further in 2022 by launching our next 100 centres and entering new markets to establish a strong presence across 18 cities in India,” Ramani added.

This story appeared in the 19  January, 2022 issue of Mint and was originally published  at : Co-working operator Awfis aims to double footprint, add more cities (