Majority of startups are now incorporating real estate strategies such as consolidation, expansion and focus on peripheral locations to save cost.
BENGALURU | MUMBAI: With startups looking at affordable work spaces and central government creating an enabling environment for entrepreneurship, demand for co-working spaces has gone up.
“Co-working spaces are popping up across metros as well as tier-II cities, and are helping many startups get flexible working options at prices they can afford,” said Anuj Puri, chairman, JLL India.
For a tech startup, cost of setting up an office in Mumbai, Delhi and Bengaluru range from $25,359 to $30,081 per annum, while operating out of co-working space would help these startups save anywhere between 72 per cent and 76 per cent, showed a Knight Frank report.
“In terms of startup costs in Bengaluru, ‘co-working’ offers a discount as high as 72 per cent compared to owning office space. In the context of global cities, co-working startup cost in the city is the most competitive at $7,100 next to Bangkok,” said Samantak Das, national director, research, Knight Frank India.
Startup data tracking firm, Tracxn said there are 61 co-working spaces in India, of which 16 were set up in 2016.
Recently, New York-based office rental startup WeWork, valued at $10 billion, said it plans to enter India by setting up its first office in Bengaluru. Another commercial builder, RMZ Group has also opened its community workspace venture CoWrks recently.
“Businesses have begun making the switch to a co-working facility not only because of pricing and flexibility, but more importantly because they realise that it is a much better way of working,” said Sidharth Menda, CEO, Cowrks.
Xander fund-promoted Virtuous Retail that set up Hive in Bengaluru is seeing huge demand for co-working space. “One key concern for a startup is to be able to establish base camp in a clean, secure and creative environment surrounded by like-minded people,” said Rajiv Raichand, director, Virtuous Retail.
Majority of startups are now incorporating real estate strategies such as consolidation, expansion and focus on peripheral locations to save cost. Experts says a company can save up to 25 per cent on its costs by rationalising office spaces.