According to a Cushman & Wakefield survey, Bengaluru has the most co-working spaces occupying 32% of the market share and this is driven by the demand for flexible workspaces, particularly from start-ups in the city. And in another survey by Knight Frank - the annual transaction numbers in the co-working segment is likely to triple from current levels over the next three years.
International Workplace Group (IWG) is the global leader for flexible workspaces with 3,000 locations in over 100 countries and 1,000 cities across the world. The Switzerland-based company operates two brands in India – Regus and Spaces (into co-working spaces).
Spaces has expanded its footprint in India with two new co-working sites in Bengaluru. The new Spaces locations in Fairway and Shantiniketan in the city are spread over an area of 68,200 sq. ft. with seating capacity for over 900 people. The co-working hotspots offer unparalleled accessibility and a strong lifestyle-led workspace for a creative way of working for entrepreneurs and established businesses alike.
Both the co-working workplaces offer a wide selection of comfortable private offices, fully-serviced designer meeting rooms, a business club catered to networking as well as an event space. The unique European design, music curated in Amsterdam, coupled with great coffee and the casual seating areas offer a creative environment, ideal for collaborating and networking to cultivate exciting opportunities.
Spaces is expanding to all Central Business district (CBD) locations worldwide driven by high demand from their customers. In India, the plan is to double the Spaces footprint in the next six to 12 months across the major cities. According to IWG Global Business Survey, 58% of employees in India, work remotely from locations other than one of their company’s main office locations and 95% believe flexible working helps their business grow by enabling employees to be more productive while on the move.
Harsh Lambah, India Country Manager for IWG Group spoke to TNM on the evolution of the co-working ecosystem in India, expansion plans of the company and the trends in this industry, among other things.
Here are excerpts from the interview.
How did the whole concept of Spaces come about in India?
Spaces is an Amsterdam-based company, which we acquired about 3.5-4 years back. Now it’s part of the IWG platform. We brought Spaces into India last year. With the launch of these two Spaces in Bengaluru, we have six Spaces in India right now.
The whole concept about Spaces is to have a large inspirational, transformational space that allows for greater innovativeness in terms of more community feeling, collaboration, and provides a platform to just about anybody; whether a startup, entrepreneur or a millennial or large companies that are looking at this platform to really focus on their core competency and take advantage of the inspiring ambience of the space.
We are the only company in this industry which offers a platform for different customer needs.
When did you start operations?
IWG started in India in 2005 and this is our 13th year now. Spaces came into India last year and IWG as a company acquired it about four years back.
Each of our workspaces is an ecosystem, which has a combination of all types of companies. This ranges from one person to two people, partnerships to small and medium enterprises to Fortune 500 to large Indian companies.
We have memberships for co-working which are flexible. These can go from one month to whatever tenure. That’s why a lot of startups and a lot of entrepreneurs are coming into co-working because this gives them flexibility. They are not tied in to a conventional lease of three years or five years.
We are very aggressive about Spaces expansion plans. We are looking at putting multiple Spaces in each of the major metros viz. the NCR region, Kolkata, Hyderabad, Pune, Mumbai, Bengaluru and Chennai. In the next 8-12 months, we would have doubled the existing six into 12 or more Spaces.
Today, we have 16 workspaces in Bengaluru itself and we will look at doubling it in the next 24-36 months. Bengaluru being the mother of the startup environment, we are very focussed on expanding our network here, both of Spaces and Regus and we are doing it in a very aggressive way.
How do you zero in on a particular location where you want to set up?
For Spaces, we are looking at iconic buildings. We are looking at buildings with character, like a heritage building in the city or just a full building in itself. And going from anywhere between 30,000 sq. feet to 1,00,000 plus sq. feet. As soon as we find these buildings, we then negotiate with the landlords or the developers to open Spaces there.
Spaces itself is a very iconic brand, so we want to make sure that it matches with the building that it’s in. We either take these buildings on lease or we look at a sharing agreement with the developers. We don’t buy the space or the buildings.
Investment expected in the Indian market
I can’t give you India-specific numbers because we don’t give these numbers out by country. But I can tell you that globally, we are spending about 230 million pounds in 2018 to expand the network. And because India is our focus country, in the next 36 to 48 months, we plan to double our network from 110 to 200+. A significant part of this investment will come into India.
Any plans of entering Tier 2 cities?
We are already there in Tier 2 cities and we are the only global co-working company which has a presence in Tier 2 cities. In the south, we are in Coimbatore and Vizag; in the north, we are in Chandigarh, Lucknow and Jaipur; and we have a very good experience at all these cities. And we have in fact opened our second workspace in most of these cities. We have got the Regus format in smaller cities like Vizag because it is more compact, and more suitable to the Tier 2 environment. So we will be expanding in Tier 2 cities with Regus while in the metros, we will have a combination of Regus and Spaces to give choice to our consumers.
What sets you apart from the conventional office space?
The reason that we have been successful is because of technology. People don’t have to be at any particular place to work. They can be productive anywhere because of the Cloud connectivity. That’s allowed us to create a network to support the convenience for customers through less commutes, work-life balance and availability of our network. The second part is that we offer cost advantages compared to a conventional space. Companies, entrepreneurs save at least 15-30% from conventional space when they look at a co-working space. When you have your own space, there is also an opportunity cost, the capex (capital expenditure) required, the support services that you will get, reception, security, power. But all these are taken care of here.
Moreover, any IWG platform that you walk into, you will see the same global standard.
Trends in this particular market
I think the co-working trend is a very strong trend and it’s the latest in the trends that are happening in the world of work. This industry was started by our founder Mark Dixon in 1989 in Brussels, Belgium. Co-working is a collaborative concept which has taken the world by storm. In fact, in 2017, co-working was the fastest growing industry in the world.
A lot of new players will be coming in, startups as well. It will be good for the industry because it will widen the category. There will be more awareness of co-working and I think as a leader and as a pioneer within this industry, we will be driving the change. We want to establish and penetrate more of the cities we are already in, as well as go to newer Tier 2 cities. India is currently in the top 10 markets for IWG in terms of growth. We are one of the very few countries which has more than 100 workspaces within the IWG family. Seeing the interest and the expansion that is happening within the industry here, we are very focussed on our growth and on maintaining our leadership position in India.
The co-working trend will continue in the next 8-10 years but it’s going to change as we go along. Bengaluru is right at the forefront of this revolution, that’s why you see a lot of co-working spaces have established themselves in the city.