At 27% Mumbai Sees Highest Coworking Rental Growth Since FY20 Among Top 5 Flex Workspace Hubs
Avg. monthly rentals per seat for flexi spaces in Mumbai stood at INR 15,900 as of FY 2024 while back in FY2020 it was INR 12,500 per seat
Gurugram witnessed 19% growth in same period – from INR 8,500 per seat in FY2020 to nearly INR 10,100 per seat in FY2024
Delhi, Bengaluru, & Noida saw growth of 18%, 15% & 14% respectively in avg. monthly per seat rentals
Meanwhile, 34 Mn sq. ft. fresh coworking stock has been added since 2017 till date across key cities like Delhi, Mumbai, Gurugram, Bengaluru, Hyderabad, Pune & Noida
Coworking contributed 18% of total office supply in top 7 cities’ office leasing market in current financial year
Current market size of flexible office real estate across the country is approx. 55 Mn sq. ft. & is expected to reach b/w 100 Mn sq. ft. – 140 Mn sq. ft. by 2030
The office work culture has undergone a profound transformation in the last decade, particularly since the pandemic. And the rise of the coworking ecosystem, carving out a niche within the traditional commercial office space, stands as a testimony to the changing nature of work. Amidst this changing scenario, prominent cities have seen a growing demand for flexi office spaces, leading to a decent rise in average rentals per seat.
MyHQ by ANAROCK
The latest report by MyHQ by ANAROCK indicates that among the top 5 prominent coworking cities, avg. monthly rentals per flexi space seat has seen the highest jump (of 27%) in Mumbai in the last four years. The cities considered include Mumbai, Delhi, Gurugram, Noida and Bengaluru.
The avg. monthly rentals per flexi space seat in Mumbai stood at INR 15,900 as of FY 2024 while back in FY2020 it was INR 12,500 per seat.
Gurugram witnessed a 19% growth in the same period – from INR 8,500/month/seat in FY2020 to approx. INR 10,100/month/seat in FY2024
Delhi’s flex workspaces rental growth is 18% – from INR 10,000/month/seat in FY2020 to approx. INR 11,800/month/seat in FY2024
In Bengaluru, the avg. monthly rent for flexi spaces was INR 7,800/month/seat in FY2020 and increased to INR 9,000/month/seat in FY2024, thus recording a 15% jump
Noida saw growth of 14% in avg. monthly rentals of flexi spaces in last four years – from INR 6,500/month/seat in FY2020 to INR 7,400/month/seat in FY2024
Utkarsh Kawatra, Senior Director – myHQ by ANAROCK, says, “The Asia-Pacific region has emerged as an important market for coworking spaces in the last few years, and demand is growing rapidly. Hong Kong, China, India, and Japan are among the large centres that are witnessing massive growth. India, being a hot bed for startups across various sectors and industries, is witnessing steady demand for flexible, economical workspaces.“
“The market size of flexible office spaces in the country is expected to grow aggressively from the current approx. 55 Mn sq. ft. to anywhere between 100 Mn sq. ft. to 140 Mn sq. ft. by 2030,” says Kawatra. “In terms of the new supply, 34 Mn sq. ft. of fresh coworking stock has been added since 2017 till date across the key coworking cities – Delhi, Mumbai, Gurugram, Bengaluru, Hyderabad, Pune and Noida.”
The report also highlights some notable trends witnessed in the coworking segment in CY2023. For instance, some of the world’s biggest corporates are now opting for flexi workspaces – including Google, Samsung, Rolls Royce Energy, Kotak Mahindra Bank, L&T, and others. Further, coworking players had significant contribution in terms of commercial real estate absorption in the top 7 cities. Key coworking brands including WeWork, AWFIS, COWRKS and Oyo Innov8 have increasingly started using technology solutions to create experiential workplaces via asset and inventory management, on-demand meeting room booking facility, parking automation, and smart visitors and access controls.
The report’s data indicates that coworking spaces comprise nearly 18% of the total new office supply across the top 7 cities’ office leasing market in CY2023. Funding in the coworking sector has also been promising, with a influx of funding in the post-COVID-19 era in comparison to the pre-COVID-19 period. Equity funds into this segment did not dry up even at the peak of the COVID-19 pandemic in 2020, indicating firm inherent confidence in coworking – and perhaps also factoring in the possibility of a rebound post COVID-19.
Other Report Highlights
20% of the total office supply addition in the last 2 years has been procured by flex workspaces
An average coworking centre of 20,000 sq. ft. can fetch an internal rate of return of 40-70%
70% companies have adopted a hybrid work model
2 out of 3 industry professionals believe the demand for coworking spaces will outstrip that of traditional office spaces by 2030
Hotels and F&B outlets have also started opening coworking wings to maximize revenue from day-time unutilized inventory. These include Roseate, Sheraton, and Socials, among othersith a projected growth to 65 million sq. ft. by 2024, the market is strong. High occupancy rates of 90-100% indicates strong demand. This transformation is bound to reshape the work culture in India.
Download the reportNew Age Flex Workspace – Efficiency, Productivity and Coverage
