For Mumbai-based social-gaming app Bakbuck, India’s nationwide lockdown landed like a suckerpunch. Since it was implemented on 25 March, the company’s advertising revenue has plummeted 75%. It could no longer afford the Rs 75,000 ($990) monthly rent it paid co-working company 91springboard. After around two years of working out of the co-working space, Bakbuck’s team—down to six from nine—decided to move out. They currently work from home, and will likely do so for the foreseeable future.
But even as Bakbuck and other small businesses like it gather their belongings and trudge out of shared working spaces, co-working companies aren’t particularly worried.
In fact, they’re looking towards the future—one filled with enterprises, rather than the startups and individuals traditionally associated with the co-working phenomenon. In a post-Covid world, co-working companies are looking to cater to larger businesses which want to prune headcount and establish multiple small offices to minimise the impact of a potential infection.
It’s an opportunity India’s co-working space is already prepared for. Especially since, over the past few years, most co-working spaces in India have become a collection of enclosed private offices rather than the large, open workspaces they once were.
It’s a business bet, taken a while ago, that may have inadvertently given the largest co-working operators in India a distinct edge in weathering the Covid-19 storm.
“Enterprises are the only way to have predictable cash flow over the long term. We have consciously avoided startups,” says Harsh Binani, co-founder of Smartworks Coworking Spaces.
Smartworks counts 400 enterprises, including the likes of Microsoft, Samsung, and consulting firm EY, among its clientele, and manages 60,000 desks across nine cities. The company claims daily enquiries from potential clients have risen to 80 from 50 over the past two weeks.
But this is small comfort for co-working companies as they renegotiate rentals for the lockdown period with both landlords and clients, even while preparing their centres for the new status quo.
Thanks to social-distancing norms, the average space per desk in Indian offices is likely to increase to 80-90 sq ft in a year, from 60 sq ft now, according to Karan Singh Sodi, Mumbai-based regional managing director at Jones Lang LaSalle (JLL), a provider of real estate services.
Which means fewer occupied seats on any given day for co-working spaces.
“If we have to have a six feet distance between two people, we may have to leave every alternate desk empty,” says Abhishek Goenka, chief executive officer of CoWrks India, a premium player competing with WeWork India.
At the end of 2019, India had 30 million sq ft of flexible office space, including business centres, according to a report by CBRE, a real estate consultancy. This is a 58% jump from 2018. Bengaluru was the top city, with 8.5 million sq ft, followed by Delhi-National Capital Region (including Gurugram and Noida), which had seven million sq ft.
