Co-working player Smartworks has taken a total of over 6 lakh sq ft of office space on lease in Mumbai, Pune and Hyderabad to set up new centres as part of its plan to expand business despite the COVID-19 pandemic. Founded in April 2016, Smartworks Coworking Spaces Pvt Ltd, currently has 31 co-working centres, comprising about 60,000 seats and 40 lakh sq ft area, across nine cities.
According to sources, Smartworks has taken on lease over 2 lakh sq ft area each in Mumbai, Pune and Hyderabad since March this year to set up three new large co-working centres, targeting big corporates.
The centre at Times Square building in Mumbai is likely to start from next month with 3,000 desks. The co-working facilities at Pune and Hyderabad are slated to be launched within this fiscal year. A Smartworks spokesperson declined to comment on the leasing transactions.
In October last year, Smartworks had announced raising of USD 25 million (about Rs 175 crore) from Singapore's Keppel Land Ltd to fund its expansion plan and touch 1 lakh seating capacity. The company's founder Neetish Sarda had said that it was the first round of external funding.
Its co-founder Harsh Binani had said that the company was profitable at an entity level.
Smartworks has co-working centres in Delhi, Noida, Gurugram, Kolkata, Bengaluru, Mumbai, Hyderabad, Chennai and Pune. It mostly focuses on large corporates and its clients on an average take 250-300 seats. Smartworks charges on an average Rs 10,000 per seats, with per-seat fee ranging from Rs 6,000 to Rs 30,000, depending on the location.
Gross and net leasing of office space across major cities in India hit an all-time high during 2019 calendar year at around 60 million sq ft and 47 million sq ft, respectively.
Co-working segment contributed around 15 percent of the overall absorption of office space last year.
The co-working segment in India had been growing at a rapid pace since last few years, before it was hit by the COVID-19 pandemic. According to property consultants, office leasing is likely to drop by 30-50 percent this calendar year, as corporates have deferred their expansion plans due to the pandemic. New supply will also be adversely impacted.
However, experts are of the view that the demand for flexible workspace could rise post COVID as corporates would look to avoid capital expenditure on setting up their own offices. There are around 400 co-working players in the country at present and consolidation is on cards.