The future of work is coworking and collaborative work spaces. At the 9th CII Realty & Infrastructure Conclave held recently in Mumbai, JLL India alongwith WeWork released the report ‘Future of Work – The CoWorking Revolution’. It’s the first such report co-authored by JLL India and the Adam Neumann founded, global coworking giant WeWork, who made its debut in India in July this year in Bangalore.
Ramesh Nair, the CEO & Country Head of JLL India said,
The concept of coworking is not new; however, the tremendous growth it has seen around the globe and now in India – in recent years is tremendously exciting.”
This growth has been primarily led by millennials and the transformation in work spaces – free wifi, colourful furniture, wall murals, casual clothing and a general sense of welcome openness – is also reflective of the lifestyle of millennials who are also digital nomads. The alternative workspaces and activity-based working concepts are considered the direct result of simultaneous disruption and innovation in the workspace.
India is the youngest startup nation in the world where 72% of the founders are less than 35 years. These startups hire young millennial talent who demand open, flexible areas to brainstorm, meet and collaborate as well as quiet reflection zones. Their approach to and style of work is causing an evolution and disruption of the work space. And this change is here to stay – millennials already form 25% of the workforce in the US and represent half the population in India. By 2020, they will form 50% of the global workforce. The sharing economy will be central to the economic future of the millennial workforce.
Juggy Marwaha, Lead – WeWork-India who was present for the release and was part of a panel discussing the Future of Indian Work Spaces, believes this will be the future of offices. WeWork’s Indian building in Bangalore is called WeWork Galaxy and occupies a whopping 140,000 square feet. It’s located in the center of Bangalore with access to shopping malls and centres, movie theatres as well as numerous eateries and pubs, providing a wholesome cultural vibe. WeWork Galaxy is the result of a collaboration between WeWork and India’s Embassy Group, a Bangalore property firm.
The Embassy Group was looking to tap into the growing commercial real estate sector and wanted to do something in the startup space. WeWork, headquartered in the US was simultaneously looking to expand its operations to India and had been in talks with Indian players. Their joint collaboration to set up WeWork India came about quite organically and are now looking to set up seven more centres across the country by the end of 2017, including Mumbai, Gurgaon and one more in Bangalore.
Marwaha also believes that this work culture will positively impact other areas of the real estate industry. At the conclave he added,
Retail and social infrastructure improves as the commercial asset and working community in the area grows. Brands like WeWork have enhanced asset value. Flexible leases and strong partnership will drive the model.”
According to the JLL-WeWork report, the coworking segment in India is expected to receive $400 million in investments in 2018. Consequently, the segment is expected to grow by 40-50% in 2017. India currently has less than 100 branded coworking spaces,but this is set to expand by 4x over the next three years. Aggregated shared offices are set to reach approximately 500 centres by 2020 from the present 150.
However, the potential market size for this segment across India stands in the range of 12-16 million comprised mostly of freelancers, startup employees and similar staff at emerging businesses. These are significant numbers since, office rental costs across India continue to rise and the total space leased by coworking operators in the top cities could potentially stand at 7-9 million sq. ft. by 2020.
Coworking spaces are attractive due to the cost-effective nature of the business and the zero gestation period and maintenance costs. For developers, landlords and investors the coworking revolution signifies higher occupancy rates, flexibility in leasing, better pricing models as well as low working capital. The age of the cubicle and individual space is on the wane while collaboration, sharing and more integrated human experiences will be the norm in the new future workspaces.