Smartworks leases 2.5 lakh sq ft in Hyderabad’s Aurobindo Galaxy – ET RealEstate

NEW DELHI: Smartworks, a homegrown co-working startup, has leased 2,50,000 square feet in Hyderabad’s Aurobindo Galaxy, taking its total operational space in the city to 4 lakh square feet, a senior executive of the company said on Tuesday.

This, at a time demand for flexible office spaces has risen after pandemic-induced lockdowns. Companies are weighing a hybrid working model—work from home and office—amid the need to maintain social distancing to reduce the risk of contracting the novel coronavirus.

In fact, Smartworks is on an expansion spree—planning new facilities in Noida, Uttar Pradesh, and more coworking spaces in Hyderabad, Bengaluru and Pune.

“We have actually doubled our footprint in Hyderabad. Hyderabad is an important part of our strategy. After Bangalore, it is the largest in terms of size and potential. Our first facility, Purva Summit, is 80-85% occupied by enterprises and high-growth startups,” said Neetish Sarda, founder at Smartworks.

According to Sarda, 30-35% of the new facility has been booked by enterprises.

Centrally located in the city’s business hubs, Aurobindo Galaxy scores on the connectivity front as well, with quick access to Hyderabad airport, metro stations, commercial establishments and residential areas. It is the tallest commercial office tower in India built with precast technology.

“We are witnessing high demand and enquiries from enterprises, our new facility is 35-40% booked already. With the workforce returning to work, they (companies) want to solidify their workspace strategy going forward. We remain optimistic about the flex space growth and momentum,” Sarda said.

Average seat cost in a traditional office space is around Rs 14,000-15,000 while Smartworks offers a seat at around Rs 10,000-12,000. The new facility will offer close to 4,000 seats.

Smartworks acquires an entire building and converts it into a coworking campus, unlike other coworking operators that usually acquire a floor or portions. According to JLL, the current market penetration of flex spaces in total office space stands at 3.0%.

In 2021, India is expected to witness deeper penetration of flex spaces as corporate occupiers continue to shift away from long-term capital-intensive commitments. Flexible space solutions will be leveraged to satisfy temporary space needs, support a more mobile workforce and enter new geographies.

“In fact, driven by increased demand from large enterprises, we expect the size of the flex space market to reach nearly 39 million square feet in 2021,” JLL said.

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Smartworks to invest Rs 100 crore to expand presence in NCR – ET RealEstate

NEW DELHI: Smartworks, the home-grown shared office space provider, will invest up to Rs 100 crore in expanding its presence in the national capital region (NCR), its founder Neetish Sarda told ET.

The company is in the final stages of acquiring 5 lakh sq ft in NCR.

“We are seeing a lot of traction in Noida so more than 90% of our future inventory will come in Noida. Our existing building is almost fully occupied so we are on the lookout for fresh property. The new asset should be ready by October,” said Sarda.

According to a Knight Frank report, co-working operators took up spaces selectively across NCR in H2 2020.

From a 3% share in H1 2020’s total leasing, it increased to 12% in H2 2020.

Smartworks acquires the entire building and converts it into a coworking campus, unlike other coworking operators that usually acquire a floor or portions of a commercial building.

The company plans to have 3 million square feet of office space in NCR in three years.

“There is a lot of demand for shared space for the last few months. We have seen double-digit growth in leasing in nine cities we are present in. We expect this trend to continue and that is why we have aggressive plans for expansion,” said Sarda.

Co-working operators established office footprints in Delhi in locations such as Okhla and Defence Colony.

In Gurugram, it was Udyog Vihar, Qutub Plaza and Sector-45 that attracted coworking players.

According to a report by property consultant JLL, irrespective of several short-term disruptions and challenges, increased demand from large enterprises, will support the growth of the flex space market to more than 50 mn sq ft by 2023.

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Smartworks lease out 80,000 sq ft space to IT firm in Noida – ET RealEstate

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NEW DELHI: Co-working firm Smartworks has given on lease over 80,000 sq ft of office space, comprising more than 1,300 desks, in its facility at Noida to an IT-software company as corporates look for flexible workspace amid COVID-19 pandemic. Leading property consultant Knight Frank India facilitated this leasing deal, one of the biggest in the co-working space.

Smartworks, which has been founded by Neetish Sarda and Harsh Binani, currently has 31 centres, comprising more than 65,000 seats, across nine cities — Delhi, Noida, Gurugram, Mumbai, Pune, Kolkata, Chennai, Hyderabad and Bengaluru.

The company focuses on large corporates and its clients take on an average 250-300 seats. It charges on an average Rs 10,000 per seat, although the per-seat fee ranges from Rs 6,000 to Rs 30,000 depending on the location.

According to sources, Smartworks has leased more than 1,300 seats spread over 80,000 sq ft to a software company in its facility – Smart Work Corporate Park, sector 125 Noida.

Smartworks and Knight Frank India spokespersons declined to comment on this deal.

Last year, Smartworks had raised USD 25 million (about Rs 175 crore) from Singapore”s Keppel Land Ltd to fund its expansion plan.

Founded in April 2016, Smartworks Coworking Spaces Pvt Ltd has invested more than USD 20 million in the past three years to set up this business. It is profitable at an entity level.

Before the coronavirus pandemic, the co-working segment in India was growing at a rapid pace, but the office space demand was impacted significantly. Corporates deferred their expansion plan and also adopted work for home policy for their employees.

As a result, the Knight Frank recent report suggested that the gross office space absorption declined 35 per cent to 39.4 million sq ft across eight major cities in 2020 from 60.6 million sq ft in the previous year.

However, industry experts feel that the co-working segment will bounce back faster, with more and more corporates opting for flexible workspace solutions.

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Coronavirus-fueled uncertainty could accelerate consolidation of flexible office spaces – ET RealEstate

BENGALURU: The flexible office space is expected to undergo a major consolidation phase with uncertainty looming large on the segment due to the Covid-19 pandemic and a resultant demand slump.

While a large operator like RMZ is exiting the business, global major WeWork plans to expand as per client specifications only for some time. Awfis and Smartworks have also slowed down the pace of expansion as they continue to study the evolving market dynamics.

“We will grow as per our client requirement and focus on opportunistic expansion rather than speculative,” said Karan Virwani, CEO at WeWork.

Though consolidation within co-working space started in 2018 with major acquisitions like One Co.Work acquiring IShareSpace and AltF CoWorking acquiring Noida-based Daftar India, Covid-19 will accelerate the process as weak players will be weeded out, say experts.

The period of low occupancy with increased operational costs is making multiple small players unviable. “There will be huge consolidation in the co-working space as managing cash flows will become difficult. We are onboarding clients and offering rental waiver till they occupy the facility,” said Neetish Sarda, cofounder of Smartworks.

The pandemic has hurt small co-working space operators with around 3.2 million sq ft of flexible office space expected to be vacated this year, according to a study by Knight Frank India. “We expect larger players with a greater weightage of enterprise tenants to endure, while those with tenant profiles predominated by MSMEs and startups are expected to shut businesses,” said Shishir Baijal, chairman, Knight Frank India.

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