Smartworks Coworking Spaces has taken more than 400,000 square feet of office space in Bengaluru and Mumbai on a long-term lease spread over 15 years in a bid to use the Covid-19 crisis as an opportunity to grow in a less competitive market. With this deal, financial details of which were not disclosed, the Noida-based co-working spaces operator’s footprint has expanded to more than 4 million sq ft, with a total investment of Rs 250 crore so far.
“We are very bullish on scaling our business in the existing cities. We have leased over 1 lakh sft in Bengaluru alone in the last two months to clients across IT-ITes/BFSI and manufacturing,” said founder Neetish Sarda. Smartworks has been growing in southern and western India since early 2019 and is expected to expand its workplace portfolio to 4.5 million sq ft by 2020-end. “Smartworks has clocked over Rs 100 crore in revenue and has been profitable for an entire year at the corporate level,” said Sarda.
Currently, the company has 70, 000 seats spread across 31 centres in nine cities, including the National Capital Region (NCR), Mumbai, Bengaluru, Hyderabad, Pune, Chennai and Kolkata. “We are growing as per our clients' requirements and are seeing demand from large companies,” said Sarda.
In October last year, Singapore-based Keppel Land had invested US $25 million in Smartworks Coworking Spaces for a minority stake. The company plans to enter cities such as Bhubaneswar and Ahmedabad with small-format facilities in coming years.
It has a presence in nine major Indian cities – Delhi, Noida, Gurgaon, Kolkata, Bengaluru, Mumbai, Hyderabad, Chennai and Pune. Many large companies and e-commerce firms are likely to adopt a mix of core workplaces and external flexible options post COVID-19.
Co-working has been among the fastest-growing segments for the past three years. However, the segment saw a huge contraction in business due to the global outbreak of COVID-19. According to the latest report by Knight Frank, smaller co-working space operators are expected to find it very difficult to weather the COVID-19 storm with around 3.2 msf of flexible space anticipated to be vacated by these operators in 2020.