That's my spot: Finding a space in the era of co-working culture
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With 2,197 co-working spaces, India ranks second after the United States (3,700) and before the United Kingdom (1,044). Co-working spaces in India have doubled in the last four years, thus, becoming more popular among businesses. These spaces had a notable increase from 14% in 2019 to 27% in 2023 across the top Tier-1 cities.
Over the past two years, there has been an increase in demand for co-working space, particularly in Tier-1, Tier-2, and Tier-3 cities. With the rise in the number of startups in Tier-2 and Tier-3 cities, the increased options for employees to work from home have led to growing demands for co-working spaces. Likewise, many companies have either set up regional offices or opted for these co-working spaces allowing their employees to work from their respective hometowns. Additionally, the top-notch facilities like fully managed office spaces, high-speed internet, IT support, and unlimited coffee access have continued to attract people in smaller cities to also opt for co-working spaces.
Tier-2 cities like Jaipur, Chandigarh, and Coimbatore are witnessing a surge in demand for these flexible workspaces. Many factors are leading to increased demand for co-working spaces beyond the metros making their way to smaller cities. In contrast to the rising cost of living and rental charges in Tier-1 cities, the affordable rental charges, improved connectivity, and digital infrastructure have enabled entrepreneurs to establish their enterprises in smaller cities. Ravindra Pai, Managing Director of Century Real Estate highlights that, “Companies are looking for working spaces in smaller towns to provide much-needed flexibility to their workforce while also maintaining the overall well-being of their employees.” However, the advantages of co-working spaces extend beyond affordability and infrastructure. These spaces foster a sense of community, allowing individuals to network, and facilitate collaboration among the professionals from various backgrounds. In Gurgaon, these shared workspaces are allowing companies to either scale up or down without being impacted by long-term leases.
The rise of co-working spaces is also attributed to big companies looking for opportunities to expand their reaches to smaller cities. IWG in 2022 signed a deal with Conjonix to build 18 of its centres across Delhi-NCR, Haryana, Uttar Pradesh, Jammu and Kashmir, and Gujarat. These companies have their establishments in Tier-2 cities like Vizag, Coimbatore, Lucknow, Chnadigarh, Jaipur but also plan to expand its presence in Panipat and Kochi. Ahmedabad, Indore, Bhubaneswar, Lucknow, and Chandigarh are among India's rapidly expanding cities where co-working space operators could tap into their growing demands. Anuj Puri, Chairman of ANAROCK Groups (a flex operating company) highlights that, “Considering the growing opportunities in many of the tier-II and -III cities, few large corporates are seeing it an opportune time to expand their base there, leading to the rise in trend of flexi spaces vying for spaces in tier-II and -III cities over the last one year.” Additionally, a co-working space managing company like Smartworks, Awfis also plans to establish co-working spaces in tier-II cities.
Co-working spaces are becoming more popular among freelancers. About 11.19% seats of total coworking seats are occupied by freelancers in India. MarketWatch reports that India’s freelancer community is expected to grow to ₹1,60,000 crore to ₹2,40,000 by 2025. While the global coworking market is expected to witness a rise of 27.28% by 2030. Karan Warwani, CEO of WeWork highlights that the increase in freelancing and the gig economy has mobilised the modern workforce, leading to a rising demand for flexible workspaces. A Chandigarh-based co-working space provider, Next57, provides tailored co-working spaces to freelancers, entrepreneurs, and startups in Tier-2 and Tier-3 cities. Currently, they provide co-working spaces in Mohali, Chandigarh and Gazipur. Co-Founders Prashant Sharma and Mohak Goyal aimed to set up these spaces to break the concept of high prices from non-moveable four seated cabins to more flexible spaces to work.
Nowadays, the idea of reverse migration and working close to home has become increasingly popular, enabling flexible workspace operators to cater to the needs of a workforce in Tier-2 and Tier-3 cities. Large companies like Deloitte and Freshworks have bought co-working spaces with about 3000 seats in small cities and mid-sized cities like Coimbatore, Pune and Meerut. These companies have been opting for cost effective solutions. Similarly, WeWork, one of India's leading co-working spaces provides 60% of its spaces to companies like Colliers India, Khaitan & Co, Tata Sky Broadband while the other 40% is taken over by startups, freelancers, and small and mid-sized Enterprises.
Amid the growing trends of co-working culture in smaller cities, Goa plans to have high-speed internet across its rural areas, attract digital nomads and create co-working spaces along its beaches. Goa’s Tourism Minister highlights that, “By next year, we should have the infrastructure in place with beachside co-working spaces and high-speed internet to attract digital nomads and freelancers who don’t follow a typical 9-5 schedule.” Inspired by such government initiatives, Mayur Sontakke, the founder of NomadGao-a co-working space in Anjuna-Goa, Dharamkot, and Lonavala offers co-working/co-living spaces for remote workers and digital nomads while living closer to nature. Likewise, various cafes and restaurants also offer co-working facilities in both metros and smaller cities. Social, also offers collaborative workspace, a hub for artists and innovators in Chandigarh, Pune, Bangalore, and Delhi. Coworkingers.com provides the locations of co-working spaces including co-working coffee shops. Apart from metropolitan cities, they also offer a list of co-working coffee shops in Kochi, Dehradun, Coimbatore, Chandigarh, Indore, Jaipur and Goa.
Co-working spaces, while being comfortable and convenient options, come with potential risks for businesses. Issues like safety regulations, standards, access conditions, and prevention rules can be concerning. Without specific laws governing these spaces, risk consulting becomes crucial. As more large corporations move into co-working environments, the lack of due diligence could harm business integrity and confidence.
Despite the growing popularity of co-working culture and the proliferation of co-working spaces throughout India, these spaces have primarily taken root in smaller cities that are influenced by or located near larger metropolitan areas. The trend of co-working spaces in Tier-IV or lesser-known cities remains largely unexplored. While co-working spaces have proven beneficial for freelancers and remote workers, challenges related to privacy and booking conference rooms for various businesses are still not fully understood. Many co-working spaces in India's smaller towns emerged during the pandemic, driven by travel restrictions. Although some companies have found this model viable, the anticipated surge in co-working spaces that was envisioned during the pandemic has not yet become a reality!
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