Coworking Spaces first appeared in the new millennium. They mostly attracted freelancers and internet business owners seeking a different working environment than coffee shops, business centers, or home offices. Coworking has since become a worldwide phenomenon, with coworking facilities springing up to keep up with how we work. According to reports, there were 19,000 Coworking Spaces globally in 2019. They are now used by everyone, from remote workers to huge corporations. So, let us explain what is Coworking and how it is changing the rental office industry.
Coworking Spaces – What Are they?
Coworking is an arrangement in which employees from various businesses share an office space.
It enables cost savings and convenience by utilizing shared infrastructures such as equipment, utilities, receptionist, and custodial services, as well as refreshments and package acceptance services in some circumstances.
Coworking is a new method of working and sharing. Coworking spaces are developed without corporate restraints on what is regarded to be an “office” setting and offer flexible memberships to fit most demands.
Effects Of Emergence Coworking Spaces On The Rental Office Industry
1. Changing Office Regulations
Coworking Spaces are in higher demand than ever as office regulations continue to change.
The necessity for businesses to grow to new sites at reasonable operational expenses, flexible lease formality, cost-effectiveness, agility, and customized workplace solutions are all in favor of this.
2. Change In The Scenario As A Result of Covid 19
With the start of Covid-19, the Indian economy experienced a significant decline. Businesses in all industries suffered significant losses, and there was ongoing confusion regarding the lockdowns and restrictions imposed.
As a result, a lot of businesses gave up their rented spaces and postponed expansion, inflicting the real estate sector a fatal blow.
Work-from-home, remote working, and hybrid working concepts gained popularity as employees started to return to their hometowns.
Everyone thought twice about buying offices and decided to use coworking spaces instead. This provided the struggling real estate industry with a much-needed boost it needed.
3. Change In The Organization’s Preference Because Of Flexibility
Shared workspaces are gradually replacing traditional office spaces, with corporates and MNCs opting for modern-day spaces with Grade ‘A’ amenities at affordable rates instead.
As corporates continue to evaluate flexible space combinations in India, coworking operators in the country are expanding their footprint.
4. Increased Awareness About Coworking Culture
Coworking spaces have progressed a lot since their inception.
Previously, landlords were hesitant to lease out spaces to operators due to a lack of awareness about the coworking business model and unwillingness to make adjustments to the leasing space.
5. Cascading Effect On Various Related Sectors
Coworking spaces are changing not merely the look of commercial real estate in huge markets, but also how people operate in smaller towns and cities.
Furthermore, there is a cascade effect on ancillary industries such as business infrastructure and interior design.
Startups and freelancers embrace coworking spaces, noting many benefits over conventionally rented ones.
6. Improved Landlord-Tenant Relationships
Collaborative, flexible workspaces with shorter lease terms are quickly becoming standard in all major markets.
It is starting to look like a good long-term option and presents itself as a prosperous, customary landlord-tenant relationship. Flexible spaces are a haven for startups and SMEs as well as a relief for landlords.
7. Rising Popularity Among Millennials And Young Entrepreneurs
Collaborative spaces attract working people from various industries and professions, making coworking spaces the best option for millennials.
It spares them the trouble of paying exorbitant rates, setting up office spaces in their early years, and creating a collaborative environment.
Coworking spaces are the best option for most working professionals because they include round-the-clock services such as a canteen, meeting rooms, collaboration zones, and so on.
8. Access To Talent In Smaller Towns And Cities
Since remote working is now a common practice, organizations with headquarters in metro areas can now access talent from tier 2 and tier 3 locations.
This is a chance for flex space suppliers to enter new markets. To access talent in smaller towns and cities, businesses are seeking to sign long-term contracts with them.
Local real estate players are opening their doors to flexible workspaces as a result of spotting the possibility to maintain the success of their businesses.
The Future Of Coworking Spaces
As the coworking trend continues, more and more real estate investors are choosing to include coworking spaces in their portfolios.
In terms of community members, it is safe to say that coworking spaces serve as the ideal workplace, by bridging the gap between the needs and wants of the community members and by providing optimum infrastructure that promotes work-life balance at affordable prices.
As you can see, coworking hubs have a wide range of effects on the dynamics of the rental office industry.
Coworking spaces are here to stay and will develop as per the specific requirements of the Indian market rather than just copying how they have developed in the West.