Altering working trends at office has generated the need for more of co-working space than conventional spaces. Indeed, the co-working space has been giving tough competition to other office spaces and has managed to replace 25 percent of office leases. These leases are set for renewal this year and has witnessed a “hit by the demand of co-working space”. In this regard, commercial real estate analytics firm named Propstack has stated that leases of more than 50 million square feet is set to expire in 2019 and it would give a rise to the demand of co-working space. Taking note of the demand, co-working space is expected to increase from 8 square feet to 20 square feet by 2020.
Moreover, the companies are finding co-working spaces to be more valuable than conventional office spaces. The main reason behind their growth is that such places offer customized fit-outs and great tenant experience. Well, the co-working space will enable professionals to be more flexible as compared to conventional offices. Even, Seetharaman of Propstack stated that the continuous demand for co-working space is indicating towards warmer working environment. So, the companies are looking out for a place where they can operate from and pay lesser rent than the other offices. This is one of the most interesting trends getting popularized in the real estate world.
It has been made evident that Mumbai, Bangalore and Delhi/NCR govern the substantial of lease renewals with 11.62 million, 15.27 million and 9.38 million respectively. As the renewals are ready, there are chances that the need for co-working space may act as a hindrance in the way of such renewals. The chances are that the companies might not renew their conventional office space and opt for co-working space to save on capital. This could turn out to be a trouble for office space owners. Definitely speaking, co-working office spaces seem to be dominating in the commercial real estate world for sure.
The companies have noted that co-working space tends to cut the overall operating costs by 25 percent. In fact, they have found to be 25 percent cheaper than renting entire space for a single company. Moreover, it has been noticed that companies willing to expand their business for future growth requires extra space, which might add to the construction or rental costs. On the other hand, the companies operating in co-working space might have to just pay a small amount of additional rent. Generally stating, the rental amount in co-working space is shared by the companies operating in it. And this reduced the cost burden on a single company too.