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Coworking space provider, the Hive Collaborative Workspaces, a Bengaluru-based start-up, will set up three new facilities, one each in Gurgaon, Mumbai and Pune, this year.
As a part of its expansion outside South India, it has also initiated discussions with property owners across other target markets such as Kolkata, Hyderabad and Delhi.
According to Ankit Samdariya, CEO, Hive will focus on the top eight cities for growth in the first phase. Operations in Kolkata, Hyderabad and Delhi are expected within the next two years. The area to be taken up varies between 50,000 sq ft and 100,000 sq ft.
The next phase of growth will be from expansion into Tier-II cities.
Backed by the Xander Group, ‘The Hive’ currently operates in Bengaluru (150,000 sq ft) and Chennai (50,000 sq ft) with 90 and 70 per cent occupancy rates. The total space it will operate is expected to go up to 500,000 sq ft once Mumbai, Pune and Gurgaon facilities are ready.
Typically, the company has an “asset light” model where it takes properties on rent or enters into revenue sharing agreements with property owners, he told BusinessLine .
So far, the company has leveraged alternative asset classes and spaces — such as area for a hotel or a commercial space in a mall — in Bengaluru and Chennai.
Increasing competition
Samdariya knows competition is increasing. Coworking space operators accounted for 8 per cent of the market absorption (leases entered into) in 2017 as against 3 per cent in the previous year, and estimates suggest coworking to be a $2.2-billion (₹15,600 crore) market in the country by 2020.
According to a study by Colliers, pan-India leasing volume in 2017 was around 42.8 million sq ft against a net supply of about 34 million sq ft across India. Bengaluru remained the frontrunner with maximum leasing activity; while Kolkata saw the least. Demand is likely to be driven by the technology, engineering, manufacturing and finance sectors, and by coworking operators.
Value Proposition
Accordingly, Hive’s value proposition has gone beyond providing shared workspaces and regular common facilities like a meeting room or plug and play facility.
Gyms and fitness studios, shopping facilities for members, food and beverage options, including bars and event spaces, form a part of the additional offerings. In some cases, it even offers serviced apartments.
“Nearly 40 per cent of the total area we take on lease is for common spaces and other amenities, while 60 per cent is for workspaces,” he said.
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