Co-working spaces flourish in Kochi during pandemic – ET RealEstate

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KOCHI: Though the office space market is hit hugely by the Covid pandemic, the coworking space providers are finding an increased demand for small spaces from corporates, who are scaling down their operations either temporarily or permanently in Kochi.

“We are getting nearly 25 inquiries every month from the corporates who want to move to our business centre. Corporates are finding it as an attractive solution to bring down their overheads. Also, if the economy is sluggish, they could move out of a business centre, without any liabilities,” said Monlash Business Centre chief executive Jackson Mathew. A British academic publishing house and the credit card division of one of the largest nationalized banks have decided to leave their own offices and move to Mathew’s business centre.

“This trend started just after the first wave of the pandemic, sometime in September,” said Centre A Offices director Joe Francis Alapatt, who introduced the concept of a premium business centre in Kochi. Since then, a French electrical giant and a German pressure-cleaner company moved to Alapatt’s business centre on MG Road.

A couple of the existing players have decided to scale up during the pandemic itself. During the third week of April, Incuspaze, a co-working space provider, added 500 seats at their Kakkanad facility, while Vistaara, a similar provider of managed office space, added 12,000 sq ft at their Cannon Shed Road facility.

Vistaara CEO P G Gopakumar said that two leading brands in the country — an airline and a credit-card company — moved to his facility, ditching their rented offices.

According to Mathew, the concept of business centre or coworking spaces is going to catch up further in Kochi market. “Now there are only five or six organized players in this segment and in the coming years, many might set up facilities here,” he said.

When asked whether the corporates are permanently scaling down their operations in Kochi, Incuspaze business partner Sanjay Chatrath said, “The corporates are not scaling down their operations; it is just that due to the pandemic the market has become a little vulnerable. This takes a toll on their businesses, due to which they turn towards coworking spaces to seek more flexible options. We all know the short-term commitments as well as the little investments needed in terms of commercial expenses in the coworking spaces. In such times, these factors make managed offices and coworking spaces a viable solution for several businesses. They provide easy scalability, offer flexible commitments, wider reach, and good facilities even in tier-2 cities”.



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HSBC to switch to flexible workplace policy for all employees – ET RealEstate

LONDON: Banking giant HSBC has axed the plush executive floor at its London headquarters, forcing top brass to share office space with colleagues in a new post-Covid approach, it said Tuesday.

Management will lose their private floor at HSBC’s Canary Wharf skyscraper and will hotdesk — or share desk space — with coworkers elsewhere in the building, Chief Executive Noel Quinn revealed.

“Having spent more than a year working from home, the last thing I want is to be stuck in an individual office when I return to the building,” Quinn wrote in a post on social network LinkedIn.

“I want to have people around me, to reconnect with colleagues and friends, and to be able to speak to them informally.

“So my leadership team and I have moved to a fully open plan floor with no designated desks,” he said, adding that old offices have been converted to client and internal meeting rooms.

The Asia-focused lender will also switch to a hybrid or flexible workplace policy for all employees, after the pandemic fuelled a homeworking boom.

Increasing numbers of UK businesses are planning for hybrid work, splitting time between home and offices when the latest Covid-19 restrictions are finally relaxed in June.

Quinn stressed Tuesday that it would be a “missed opportunity” for HSBC to adapt to customer and staff needs, if the bank was to “drift back” to its old ways of work.

“Our people have told us they want more flexibility. We know too that the way our customers bank with us has changed.

“We need therefore to take all that we have learnt about the changing world and different working styles to make sure the future is different to the past.”

Although some roles are largely office or branch-based, the bank will also examine ways to increase their flexibility.

“We estimate that most of our roles could be done in a hybrid way — and that includes myself and the executive team of the bank,” he concluded.

As part of this approach, HSBC recently offered more than 1,200 UK-based call centre employees the chance to work from home permanently.

Other corporate titans — including Nationwide bank, accountants PwC and British Airways — are among those eyeing a hybrid work policy.

However, US investment banks remain unconvinced over the matter.

Goldman Sachs boss David Solomon has labelled remote working an “aberration” that does not suit its collaborative culture, while JP Morgan’s Jamie Dimon argues it has had a negative effect on productivity.



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WeWork India raises Rs 200 crore – ET RealEstate

NEW DELHI: WeWork India has raised Rs 200 crore from investors, through a mix of debt and equity, the company said in a media release.

Karan Virwani, CEO, WeWork India, said, “The new capital we have raised will help us in continuing our upwards momentum and truly explore the potential of flexible workspaces in the Indian market.”

The company claims to have leased 10,000 desks i.e. more than 7 lakh sq ft of area in Q1 2021. It’s enterprise portfolio has seen a 10% jump to now constitute 60% enterprise members. “Over the last year, WeWork has also seen a strong demand from enterprises, who are now looking at flexible workspaces as a viable long-term real estate option,” the company said in a media release.

In December, it had launched about 1.65 lakh sq ft flexible workspace in Embassy Manyata NXT building in Bengaluru. The location had capacity of over 3,500 desks.

It also leased out 1.5 lakh sq ft space to Microsoft in Noida and 15,700 sq ft of office space in Bengaluru to Khaitan & Co last year.



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Flexible workspaces to lease three million sq ft of space in 2021: Report – ET RealEstate

NEW DELHI: During 2021, flexible workspace operators are likely to lease about 3 million sq ft of space across the top six Indian cities, as operators are likely to focus on signing large enterprise-level deals and cut down on speculative centers, according to a recent report by Colliers India.

During 2020, flexible workspace operators leased about 2.9 million sq ft of space led by technology, and banking and financial services (BFSI) enterprises.

Flexible workspaces are here to stay, with their share growing in the real estate pie. Though 2020 was muted for the growth of flexible workspaces, markets like Bengaluru, Hyderabad & Chennai continue to drive demand. Further, enterprises are also driven by the desire to offer locational flexibility to some of their employees and functional departments. Thus, they are leasing desks in flexible workspaces closer to the employee’s home,” said Arpit Mehrotra, managing director, Office Services (South India) at Colliers.

Despite large workforces working from home, as of March 2021, top flexible workspace operators across the top six cities have about 65% of their seats already leased, signalling continued confidence in managed workplaces.

As corporate occupiers continue to be uncertain about long-term office leasing plans in 2021 and 2022 and are still re-assessing their office space needs, they are exploring leasing desks in flexible workspaces to avoid long-term capital expenditures, and to get more flexibility on their lease terms, the report said.

“Conversations for consolidations and hybrid models continue to pick up and anchor pricing benefits are up for grabs. Leasing will pick up by H2 and it is prudent to evaluate a short-term hybrid model across regions”, said Bhupindra Singh, managing director, Regional Tenant Representation (India) at Colliers.

The total flexible workspace stock in the top six Indian cities is almost 30 million sq feet, equivalent to 4.3% of total Grade A and B commercial office stock. Bengaluru leads the tally with a 37% share of the total flexible workspace portfolio, followed by Delhi NCR and Mumbai, with 18% and 14% shares respectively.

By 2022, flexible workspace stock is likely to account for 5.4% of the total office portfolio, led by demand for well-located, high quality and efficient flexible workspaces.

The flexible workspace sector remains fragmented and is dominated by operators of various sizes in terms of number of centres and total area occupied. According to Colliers, “there is likely to be consolidation in the market, mainly through smaller fragmented operators that are facing acute cash-flow challenges ceasing operations. Over the next three years, flexible workspace operators are also likely to acquire smaller players to ensure they have the geographic range necessary to support their enterprise clients’ distributed workforce.”

As occupiers focus on portfolio optimization through 2022, many are exploring ways to shift teams into multiple, smaller managed spaces than their existing large, consolidated offices or use flexible workspaces as a stop-gap arrangement until they relocate to entirely new offices. Occupiers are also likely to take up flexible workspaces near suburban residential catchments, providing their employees more conveniences and choices. Many of these existing centres are currently operating at 50-70% occupancy levels, the report said.



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