How India-Bharat scripting is shaping the growth of managed workspaces?

India’s transition to a middle-income economy is fueling the growth of managed workspaces, especially in small cities.

India is transforming into a middle-income economy from a lower-income economy, leading to more disposable income with small towns emerging as key growth centres. The cities in India occupy 3% of the nation’s land, according to Niti Aayog. However, they contribute to a massive 60% of India’s Gross Domestic Product (GDP). However, the last decade has witnessed the emergence of small cities as new growth centres with mushrooming of startups and hiring from big multinationals.

 

Managed workspaces offering premium office areas

At the intersection of this rapid growth in India and Bharat, lies managed workspaces, which are fuelling the growth of business across the board. From housing large enterprises to startups, managed workspaces are offering premium office areas in a cost-effective manner with flexible lease tenures, resulting in significant cost savings for companies. This is also resulting in mushrooming of managed workspace providers with the established ones expanding into Bharat from India along with the emergence of new players in small cities.

Today, cities like Visakhapatnam, Coimbatore, Ahmedabad, Chandigarh, and Cochin are witnessing the foray of technology companies and mushrooming of startups, along with growing intent of companies to hire from small cities, pushing the demand for managed workspaces in the country.

 

Adoption and premiumisation driving growth of managed workspace

The commercial real estate occupier market is witnessing more adoption of premium managed workspaces in metros while enterprises from small cities are increasingly warming up to the idea. According to a report by Avendus Capital, India’s commercial real estate market is expected to see strong adoption of flex workspaces including managed workspaces in the coming years as the segment is projected to grow up to about 126 Mn square feet by 2028 and address a market size of about $9 Bn by the same period. 

This is resulting from the fact that large enterprise occupiers in metros are seeking managed workspaces over traditional office spaces to rein-in high infrastructure costs while startups in small cities are increasingly adopting organised office spaces. Further, the Ministry of Commerce and Industry states that Tier 2 and Tier 3 cities nearly contribute 50% of the recognised startups in India. The introduction of startup-focused policies and funds at Centre and state levels along with huge inflow of investments, making credit cheaper and ease of doing business is fuelling this growth.

 

Expansion and foray of new service providers 

The attractiveness of the managed workspace industry is helping operators expand across the country while leading to the emergence of new providers in small cities. According to certain estimates, there were around 400+ operators with 1,500+ locations in about 55 cities in pre-covid whereas, there are about 965+ operators in 2,320+ locations in about 90+ cities.

The mushrooming of new managed workspace providers and expansion is based on startup founders, having to wear multiple hats during initial years. These include managing finance, IT support, logistics, employee, and vendor management among many things, leading to loss of productivity due to the diverted attention and time constraints. 

Managed workspaces eliminate these concerns by providing access to a wide array of services under a single roof and a single contract which makes managing multiple requirements easy. This innovative workspace model also provides occupiers flexibility to seamlessly expand and consolidate their operations to meet the diverse need of business. Business expansion goes beyond the metros and to small cities, managed workspaces will emerge as a propeller of growth for new age businesses, contributing to the economic growth of the nation.

-The author is founder and CEO of BHIVE Group.

 

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com

 

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