Co-working operators start witnessing fresh demand after five months
Co-working and managed workspace operators have started witnessing fresh demand after a five month disruption due to Covid-19 pandemic as leading co-working players have reported reaching 50 per cent fresh leasing levels in July compared to the monthly average during the pre-Covid times.
Covid induced lockdown had impacted the co-working operators the most as a Knight Frank study says that around 3.2 million square feet (MSF) of flexible space is expected to be vacated by these operators in 2020.
“We used to transact 1500 seats every month on an average but business was impacted severely due to Covid-19 pandemic. Now we are back to doing 1000-1200 seats in a month,” said Amit Ramani, Founder and CEO, Awfis.
There are over 250 co-working players operational in India but the segment is dominated by top 10 players which have cornered around 75 - 80 per cent of the market share in the top eight cities. The Indian Workspace Association (IWA) has said that its members have reported reaching 50 per cent occupancy levels.
“We continue to see contractual occupancy of the industry in between 40-50 per cent of what we were witnessing in pre-COVID times. Various players are also offering innovative solutions to suit the evolving needs of occupiers amidst the pandemic,” said a IWA spokesperson.
IWA represents leading companies like Vorqspace, WeWork India, 91 Springboard, BHIVE Workpsace and Awfis, among others. WeWork did not respond to a separate email query.
Paras Arora, Founder and CEO of co-working operator Qdesq said that they transacted 1100 seats in July. “We were transacting 1800 seats in March, and we believe we will get back to the same number by October. There was an impact on revenue due to lockdown. April to June fell by 50 per cent. In July, we saw a 10 per cent month on month pick up,” said Arora.
Managed office space provider Skootr said that there has been a dip of close to 10-15 per cent in the leased area, but leads have started coming in again. “For us, the impact has been limited being a purely managed office player. Our clients are primarily MNCs and large corporates which have been able to sail through these turbulent times slightly better than few other companies,” said Puneet Chandra, Co-founder and Director, Skootr.
However, some of the co-working operators are witnessing slow recovery and expect demand to improve with the opening of public transport. “The recovery is quite slow , but I won't say that the market is not picking up . We are confident that once public transport, especially the metro starts functioning again, the numbers will get much better.
Earlier, we used to be at 90 per cent occupancy but post-covid it has come down to 10 per cent to 15 per cent,” said Akshita Gupta, Co-Founder and CMO of ABL workspaces.