Over 13 mn People Will Operate Out Of Co-working Spaces By 2020
In India, the growth of flexible office space is expected to grow at 40 – 50% in 2018.
- Close to US$ 400 mn will be invested in co-working space in 2018
- Tier 2 market potential estimated to grow to 8.5 mn seats by 2020
- JLL latest research ‘Spotting the Opportunities: flexible space in Asia Pacific’
JLL, India’s largest professional real estate services company, estimates that over 13 million people will work out of co-working spaces by 2020. In a recently released research report ‘Spotting the opportunities: flexible space in the Asia Pacific’, the company says that demand for flexible offices – including co-working spaces and serviced offices – is growing faster in the Asia Pacific than anywhere else in the world. In India, the growth of flexible office space is expected to grow at 40 – 50% in 2018.
The region’s stock of flexible floor space is growing at 35.7 percent per year compared to 25.7 percent in the US and 21.6 percent in Europe.
The potential market size of co-working across India is expected to be 13.5 million users by 2020 about half of which will be from enterprises, which are expected to take up 10.3 mn seats. Freelancers and Small & Medium Enterprises (SMEs) are expected to contribute 1.5 million users worth of demand, while it is anticipated that startups will demand up to 100,000 seats by 2020.
The report further indicates, that the top 6 cities will require an estimated 5 million seats in co-working spaces, while, 8.5 million of the projected demand will be in Tier 2 and 3 cities.
“In India, the co-working segment is expected to grow by 40-50% in 2018 alone. By the end of the year, we anticipate flexible workplaces would attract investment up to US$ 400 mn. With over 200 premium business centers across the country, set to double by 2020, co-working spaces will reflect the global trend of being closer to 20% of total workspace”, mentioned Sandeep Sethi – MD, Integrated Facilities Management West Asia, JLL.
In response to growing demand, JLL notes that landlords will continue to form joint ventures with co-working operators or create their own flexible space offerings to meet tenants’ needs. Meanwhile, developers are adapting to what could be a new standard in property development whereby flexible work-space will be an amenity as essential in a commercial building as food and beverage outlets or a gym.
“By 2030, flexible workspaces could comprise 30 percent of corporate commercial property portfolios worldwide,” said Jeremy Sheldon, Managing Director, Markets & Integrated Portfolio Services, JLL Asia Pacific. “Although corporate adoption is still in its early days, there are certain factors that will continue to make this region a hot spot for co-working growth.”
One of the key drivers of the surge in corporate demand for flexible spaces identifies the report, is plug-and-play simplicity, particularly for larger companies. The ability to move in and out of an office at short notice, avoid complicated contract negotiations and fit-out work is a convenient option for many occupiers.
At the same time, businesses are looking to encourage collaboration among employees and are using shared work-spaces as a way to foster innovation through exposure to new ideas and ways of working.
Note: The report refers to flexible office space as the net lettable area occupied by major coworking and serviced office operators in 12 key cities across the region, excluding incubators, accelerators and corporates’ internal coworking spaces.