The Hindu Business Line : Big demand for smaller space

The demand for office space is undergoing a change in the backdrop of the global economic slowdown — enquiries for large space has gone down but demand for small space is growing, according to Mr Madhusudan Thakur, Country General Manager (India), Regus.

Regus, a leading provider of office space solutions, is finding that enquiries from start-up companies, one- and two-person operations, consultants and people working out of home are on the increase as they need office and meeting spaces.

This growth is driven by those “pink-slipped” setting up their own operations. Encouraging them are companies that have reduced their workforce to cut costs and are outsourcing operations, he says.

Changed scene

The slowdown has hit big corporations that anticipated rapid growth last year. This has changed the 80:20 thumb rule in office space demand — that is, the top 20 per cent of companies account for 80 per cent of the demand. But now it is the 80 per cent of the small companies that is driving the demand.

Regus’s usual enquiries for space is about 3,000 a month and about 10 per cent of that is from small and medium enterprises — those looking for office space for one or two persons. It is this small segment that is growing. Earlier, there was more demand for space for 15 or more, according to Mr Thakur.

So what does this mean for Regus? “Good news,” says Mr Thakur. Regus caters to the small players and it sees its opportunities growing. But the key to growth for Regus is in tailoring its office-space solutions to the changing trend and adding value.

Also, in times of uncertainty, Regus offers flexible contracts for periods ranging from one month to a year. Also, it is offering new products that small players would find attractive.

Need for services

For instance, sometimes a clients’ ‘true requirement’ for office space may actually be the services in the office space rather than the physical space. Mr Thakur says Regus is offering solutions that “make work agile.”

For instance, with the new product that Regus is launching, for Rs 958 a month, clients get a Regus Business World Card that lets them use Regus business lounge. Buyers get a professional environment, a place to work in, Internet, phone link and hot beverages. The lounge will be operational in all the 10 major cities. To add value to its existing clients using Regus office space, the world card is on offer free. There are 16 variants of the card that allows people to work from anywhere, anytime.

Another product, the virtual office, provides facilities such as answering service, phone, mail delivery and voice mail that can be accessed anywhere in the world.

Also, with over 40,000 clients, Regus has an entire demand- supply network, and it facilitates interaction between them.

Expanding the network

Regus is expanding its network with plans to enter new locations such as Coimbatore, Puducherry, Thanjavur, Bhubaneshwar, Visakhapatnam, Raipur and Ranchi — smaller cities where exports businesses are looking to set up liaison offices, Mr Thakur said.

Regus is the world’s largest provider of workplace solutions operating over 950 business centres across 400 cities in 70 countries. It’s products and services include fully furnished, equipped and staffed offices, world-class business support services, meeting, conference and training facilities and videoconference rooms serving over 400,000 clients daily.

In India, Regus set up its first centre in Mumbai in 2004 and has since them opened 20 centres in Bangalore, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Nagpur, New Delhi and Pune.