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Post vaccine rollout, demand for shared workspace up

Abhishek Law Kolkata | Updated on February 04, 2021

Amit Ramani, Founder and CEO, Awfis

Over-all occupancy averages out to 70%

Shared workspace provider, Awfis, is witnessing a rise in demand with companies signing new leases, as vaccination roll-out happens and people return to workstations. The demand, currently at pre-Covid levels, is expected to grow over the next six months.

According to Amit Ramani, Founder and CEO, Awfis, post-pandemic, traditional companies , manufacturing, FMCGs and SMEs - are looking to scale up their share of flexible workspaces as part of a contingency/business continuity plan.

From 5 per cent previously, shared workspaces account for nearly 20 per cent of their portfolio at present. The number is likely to go up to 25 per cent.

This apart, there’s a rising demand in Tier-II towns from a section of employees who went back to their hometowns during the lockdown. The company is tapping spaces in smaller cities like Indore, Kochi, Bhubaneswar and Lucknow.

“We expect to double our space count to 5 million sq ft by FY-22. Post pandemic, people are getting back to offices and there is an increase in demand for shared workspaces. Companies are signing new leases with us as they want to keep their options flexible and are preferring hybrid models (between conventional and shared ones),” he told BusinessLine.

Demand recoveries

Metros like Kolkata and Chennai are witnessing demand coming back to pre-Covid levels and occupancy is at 70 per cent levels. In comparison, the once faster-growing cities like Hyderabad and Bengaluru are witnessing occupancies at about 40 per cent levels. Recovery here is faster. However, prime cities like the Delhi-NCR and Mumbai regions are slower in terms of demand regeneration; with relatively low occupancy rates of 20-25 per cent.

“Over-all occupancy averages out to 70 per cent. It will rise to 85 per cent over the next three to six months. We will increase our presence in existing cities too. Most of our committed spaces are on time,” Ramani said.

Revenues

However, with the first half hit by poor occupancies – at around 20 per cent – and demand . revenue will be flat for Awfis, on par with that of FY20.

“We should end the year with pre-covid revenues. Doubling will happen in FY22,” he said adding that the company was EBITDA positive (profitable at a pre-tax level) in FY20 and will remain so in FY21. Awfis turned EBITDA positive Nov 2018 onwards.

While the company does not own any of the assets, it follows a “revenue-share, profit share” or “straight leasing” model.

Published on February 04, 2021

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