Small coworking operators likely to vacate 3.2 million sqft space: Report

Hit by the COVID-19 pandemic, small coworking operators are likely to vacate around 3.2 million sq ft of space, a report said.According to the report by property consultant Knight Frank, around 25 per cent or nearly 6.4 million sqft of the total 25.45 million sqft of co-working stock in the top eight cities is operated by small players.

Hit by the COVID-19 pandemic, small coworking operators are likely to vacate around 3.2 million sq ft of space, a report said. According to the report by property consultant Knight Frank, around 25 per cent or nearly 6.4 million sqft of the total 25.45 million sqft of co-working stock in the top eight cities is operated by small players. "Smaller co-working space operators are expected to find it very difficult to weather the COVID-19 storm. At least half of the 6.4 million sqft of stock or around 3.2 million sqft will be vacated by their operators within 2020 as these small operators fade away," the report said. Low occupancy and increasing cost are expected to make co-working operations unviable for fringe players and would therefore force smaller players to vacate their low performing offices, it said.

"On the positive side, the uncertain economic environment will compel more companies to look for flexible options that can adapt to and fulfil their changing requirements, without capital expenses and shorter lease terms," it said. While there are over 250 co-working players operational in India today, an estimated 75-80 per cent of the market in the top eight cities is dominated by the top 10 players. The annual space taken up by co-working players has nearly quadrupled since 2017 to a little over 8 million sqft in 2019.

"While the industry is expected to see significant exit of start-up tenants and smaller occupiers as they cut on costs in this crisis scenario, the demand from large enterprises is expected to grow over the medium to long-term," it added.