Co-working operators have leased four million sq ft of office space across eight major cities during the first half of 2019 to meet rising demand of such flexible area from corporates and startups, according to property consultant Knight Frank.
Co-working players had leased 2.8 million sq ft in the January-March period of last year.
“The co-working story – that is a global phenomenon – has taken root in India,” the consultant said in its report ‘India Real Estate’ released recently.
The report tracks residential and office markets of eight top cities — Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad.
“Across the top eight cities, co-working space providers have taken up around 4 million sq ft of office space during H1 2019 which represents a 42 per cent growth over H1 2018 and accounts for approximately 15 per cent of the total space transacted during this period,” the report said.
Total office space leasing rose by 26 per cent to 27.4 million sq ft in these eight cities during the first six months of 2019, with IT/ITeS sector accounting for 35 per cent of absorption.
“The co-working sector is growing aggressively on the back of growing demand from regular enterprise occupiers. They have begun to appreciate the design elements, community development, office environment and the vibrancy created in the co-working spaces.
“Many co-working operators have on an average 70+ per cent of their space occupied by larger enterprise clients,” Knight Frank India Executive Director (North) Mudassir Zaidi said.
Newer players backed by PE investments are entering the space, which is also leading to newer supply being created in most cities, Zaidi added.
According to the data, Bengaluru was the most preferred location for co-working players where they leased 1.7 million sq ft office space, up 33 per cent from the year-ago period.
Leasing of office space in Hyderabad by co-working operators more than doubled to 0.7 million sq ft from 0.3 million sq ft area during the period under review.
In Chennai, co-working players leased 0.4 million sq ft as against 0.1 million sq ft.
Pune saw 0.4 million sq ft leasing of office space by coworking firms from nil in the year-ago period.
However, co-working players leased less space in the national capital region and Mumbai during the first half of this year.
In National Capital Region (NCR), leasing dropped to 0.5 million sq ft from 0.7 million sq ft, while in Mumbai absorption fell to 0.3 million sq ft from 0.5 million sq ft.