Malls and hotels open up to co-working spaces

Co-working players are taking up under-utilised spaces in malls, educational institutions and hotels to expand presence as start-ups and big corporates alike warm up to idea of shared facilities over owned premises.

Co-working biggies such as International Workplace Group (IWG), Awfis and The Hive are taking the collaborative workspace model to newer spaces for meeting the demand, set to triple in three years.

Win-win situation

“One of our key focus areas has been to work on a shared-economy approach to the business. Putting assets lying under-utilised to good use creates a win-win situation for asset owners, co-working players as well as end users,” Amit Ramani, Founder & CEO of Awfis, told BusinessLine .

Afwis has set up a 200-seat co-working facility in Taj Deccan at Hyderabad and a 300-seat workspace in Bengaluru’s Dayanand Sagar Institute as also in malls at Pune, Mumbai and Gurugram. “Out of our 25,000 seats, 10 per cent are in alternative assets like these,” Ramani added.

Mall owners benefit

In malls, businesses do well up to the third floor beyond which the footfalls reduce. “We saw here an opportunity to use those assets and bring them to the mainstream. It creates higher revenue realisation for owners,” he said.

That’s precisely why IWG, the world's largest serviced offices provider with brands Regus and Spaces in India, is watching malls and hotels closely.

It already has facilities in Delhi’s Vasant Square Mall, Bengaluru’s luxury UB City and Chennai’s City Centre besides others.

Harsh Lambah, Country Manager at Regus, said, “We are in discussion with many mall operators and hotels to create an opportunity for setting up co-working business. There is a collaborative opportunity with malls located in good micro-markets as it allows for easy access, availability of F&B and good parking.”

“Where there is a commercial tower with a hotel, it is part of our strategy to take up space there. For us, location is the key factor,” he added.

Revenue-share model

Most co-working spaces operate on the leased or shared revenue model with landowners, be it malls or hotels.

“It reduces our risk. We bring value driven customer demand, their asset is utilised and customers get good facilities. So it helps everybody,” Ramani said.

The Hive, another co-working services provider, is also present in VR Bengaluru, one of the biggest shopping malls in the city and also has a 50,000 sq ft of collaborative space integrated into VR Chennai mall.

The bullishness of these players stems from the increasing demand from freelancers, entrepreneurs as well as big corporates that also brings big bucks.

According to realty consultants Knight Frank, co-working companies took up 2 million sq ft of commercial office space in the first quarter of this year alone, which is more than the 1.8 million sq ft they took up in 2017.

“Approximately 50 per cent of the client roster of an Indian co-working operator is made up of big corporates. This can rise to as high as 80 per cent in the more premium priced offerings,” Knight Frank said in a report last month.

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