How Coworking Is Disrupting Indian Commercial Realty

WeWork Bangalore (Source: BusinessWorld)

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.

WeWork Bangalore (Source: BusinessWorld)
WeWork Bangalore (Source: BusinessWorld)

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.

RERA Is A Paradigm Shift For The Better: Gautam Chatterjee

Gautam Chatterjee

The chairman of the Maharashtra Real Estate Regulatory Authority which implements the Real Estate (Regulation and Development) Act (RERA), Gautam Chatterjee is quickly gaining a reputation for being a tough taskmaster in implementing RERA in Maharashtra. A retired bureaucrat, Mr. Chatterjee is an authority in urban housing and played an important role in framing the housing rules in the state. He has previously also headed the Slum Rehabilitation Authority (SRA), Maharashtra Housing and Area Development Authority (MHADA), Dharavi Redevelopment Authority (DRA) and was also a housing secretary in the past.

The Real Estate (Regulations and Development) Act, popularly referred to as the RERA Act of 2016 has come into force from May 1, 2017 and is said to bring about a sense of clarity and order to the Indian Real Estate sector. The Act has defined a set of stringent norms for the real estate developer, the intermediary, as well as the consumer. Chatterjee believes his aim is to make the system favorable to the buyer. He says,

RERA will ensure that builders give the buyer whatever product he has promised. It will encourage transparency, fiscal discipline and better implementation of regulations.

The fact that Maharashtra’s RERA will borrow from the state’s own regulatory proposal of 2012 was also revealed.

At the 9th edition of the CII Realty and Infrastructure Conclave on 7th July in Mumbai, Mr. Chatterjee was vociferous in his plea to developers to get their projects registered before the July 31st deadline. He has promised to ensure full cooperation from the regulator as well as faster approvals. To the customer, he has promised transparency in the availability of all approvals on the Maha RERA portal.

In an interview with NDTV he stated that there are several provisions in Maharashtra’s RERA, of which the home buyers will be the beneficiary, some of which are discussed below:

  1. RERA’s Retrospective Effect:

Since Maha RERA has made it mandatory for all ongoing projects without Occupation Certificate (OC), to be registered within three months, the effect is retrospective and signifies hope for homebuyers who feel duped due to project delays and developer malpractices.

  1. Full disclosure Expected from Developers:

Developers will be expected to disclose timelines for project delivery, a method of calculation of project prices, details of materials used, among other specifications. This is to ensure buyers know what are getting into when they choose a future home.

  1. Regulation of Real Estate Ads:

Developers will no longer be allowed to lavishly advertise their projects without proper approvals. All false claims will be penalized as per provisions in the Act.

The most recent reports are that MOFA may be a thing of the past. The Maharashtra Ownership Flat Act (MOFA) 1963 is the state’s oldest legislation that safeguards the interests of consumers.  Gautam Chatterjee has written a letter to the State Housing Department, asking for MOFA to be repealed. According to Chatterjee, RERA has provisions that override all other real estate acts. At a housing event organized by Zee 24taas and DNA with CREDAI-MCHI, he said, “I have written to the government (housing department) on repealing MOFA.” He suggested, “a Maharashtra Transfer Act 2017 needs to be brought in.” Chatterjee said that such an act could cover projects that do not require registration and hence are outside the realm of RERA. “The new act will cover three aspects – liability, conveyance, and creation of a legal entity,” he said.

Live Blog: 9th CII Realty & Infrastructure Conclave – 2017: The Turning Point of Indian Real Estate

CII Real Estate Conclave
PropStory will be at the 9th CII Realty & Infrastructure Conclave – “2017: The Turning Point of Indian Real Estate” at The Trident Hotel, Nariman Point, Mumbai on July 7, 2017.
We will bring you live updates about the day’s events – comments, opinions and pictures of discussion panels and fireside chats on various topics related to the Indian real estate market as they happen. Expected guests include: Abhishek Lodha, Niranjan Hiranandani, Neel Raheja, Subodh Runwal, Anand Piramal, Boman Irani, Navin Makhija, Shrikant Joshi, Juggy Marwaha.
The event is expected to be convened by Rishi Bagla Chairman, CII Maharashtra State Council & Director OMR Bagla Automotive Systems India Ltd. The CII-JLL Report will also be released at the conclave.
Gautam Chatterjee, Chairman, Maharashtra Real Estate Regulatory Authority will speak about the “Short, Medium & Long term Impact of RERA on the Real Estate Sector”
Expected topics for panel discussions include:
  1. Better Late than Never – The comeback of Foreign Interest and Investments in Indian Realty
  2. Commercial Office: The Future of India Office Space
  3. Weighing the Scale: Rational Returns Vs Higher Transparency from changing Investor perspectives under RERA
  4. Reinventing the Retail Space of Tomorrow
  5. Manufacturing & Warehousing – The Rising Star of Indian Realty?
  6. Calm before the Storm – Is the Resurgence of Residential just around the Corner?
We hope you will follow the blog to stay updated as industry experts and thought leaders dissect and decode the transformations happening in Indian real estate. Do follow us on Twitter also.

PropStory @ 9th CII Realty and Infrastructure Conclave

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Live Blog: 9th CII Realty & Infrastructure Conclave – 2017: The Turning Point of Indian Real Estate

The Confederation of Indian Industry (CII) has organised a day long conclave titled “2017: The Turning Point of India Real Estate” on 7th July 2017 at Trident Hotel in Mumbai. JLL India as knowledge partner is driving the 9th CII Realty and Infrastructure Conclave, which brings together industry heads and stalwarts like Ajay Piramal, Niranjan Hiranandani and many more to decode the opportunities in the sector and the way ahead.

To Register for the event, click here

Ever since the introduction of RERA, the Indian real estate sector has been in a state of flux. Developers are scrambling to determine if their designs and projects – both ongoing and planned – will meet, what are thought to be defining standards in the RERA Act. State governments themselves are still finding their feet around the various guidelines. We have already some early victims and a lot of confusion. At such a time it makes sense to step back and assess how far the Indian realty sector has actually come, where it is headed and what are the various trends and developments, RERA not withstanding, that could impact it.

The Conclave’s day long events will include a key note address, fireside chats and panel discussion on focus areas ranging from commercial and retail space, manufacturing and warehousing as well as the resurgence of the residential sector. The knowledgeable doyens will also address the return of foreign investments and interest in Indian real estate, the impact of digitisation, innovation, financial optimisation and Trump’O’Nomics on the commercial office space and how RERA will affect the already changing landscape of Indian realty.

Prime Minister Narendra Modi has a dream to house all Indian by 2020. This is a very ambitious dream which he hopes to accelerate by making it easier for Indians to access funds to buy homes through schemes like the Credit Linked Subsidy Scheme which will subsidise loans upto Rs. 12 lakhs for people earning up to Rs 18 lakhs. Then there is the Pradhan Mantri Awas Yojana (PMAY) which works in conjunction with CLSS. First time home buyers who fit the income requirement will benefit from the interest subsidies which will also reduce the EMI burden on the household.

The first REIT (Real Estate Investment Trusts) will also be launched this year to further whet the investment appetite in real estate. More real estate are developing a penchant for creating smart homes and green homes. The Indian real estate industry has never been in a more exciting phase of its growth and the industry titans at the CII conclave will aim to unveil this transformation.

PropStory is the Media Amplification Partner for the event and will bring you all the updates from the day long event. Stay tuned for more on what we have planned!