It’s not just start-ups: medium and even large firms in the city are now embracing the concept of co-working spaces.
Founders of five different co-working spaces in Chennai said that earlier, it was predominately the start-up crowd that came hunting for space here but now even retail, manufacturing and logistics firms are knocking on their doors, seeking space. Cost efficiency, diversity, networking and good infrastructure are some of the reasons why various sectors are queuing up at co-working spaces in the city.
According to estimates from analysts who track the real estate market in Chennai, there are over 80 co-working spaces spread across the city. Even tier two towns like Coimbatore and Madurai are slowly embracing the concept and are opening up available spaces for co-working.
“In 2020, small to big corporates in Chennai will look at co-working as office space options. We are also focussing on building a complete ecosystem for the client to grow,” said Gurbinder Rattha, founder and managing director, Workafella. Workafella, which has one of the largest co-working spaces in Chennai, is now looking at adding new centres in the OMR belt.
Vijay Anand, CEO and founder of The Startup Centre, said, “There is a shift in the co-working model -- instead of start-ups being the main focus, co-working spaces are looking at corporates and freelancers as the main target.” Companies look at co-working spaces as the equivalent of serviced apartments, where they pay only for what they use and don’t have to worry about doing up the place and finding new offices as the team expands. “Chennai needs to position itself as a capital of national/international value if it needs to be comparative to Bengaluru, Mumbai or Delhi though,” he suggests.
Sivarajah Ramanathan, founder, Nativelead Foundation in Madurai, which handholds start-ups in the southern region, said that he will soon be opening a small space within his office as a co-working space.
Kanchana Krishnan, Senior Director & Head - Markets, Retail & Data Center, Chennai, Jones Lang LaSalle (JLL) said that co-working spaces have been one of the most positive radical changes that the commercial office markets have been embracing. “We call it the future of work”, she said. “Chennai during the year 2019 witnessed a 6.2 million sq.ft of office space absorption and year 2020 also promises to be very robust and we expect co-working spaces to be a significant part of the traction,” she added.
According to JLL, cumulative space take-up by the co-working segment from 2017 to Q1 2019 was approximately over 9 million sq.ft. In fact,Chennai has been leading the pack for the last two years in terms of absorption when compared to all other cities. Co-working space absorptions have contributed close to 22% of the city’s absorption which is pegged at 6.2 million sq.ft in 2019.
Srinivas Anikipatti, Senior Director – Tamil Nadu and Kerala, Knight Frank also said that the demand for co-working spaces in the city is increasing.
As per ANAROCK research, office space absorption in the top 7 cities stood at over 40 million sq. ft. in 2019, of which Chennai accounted for nearly 2.6 million sq. ft. office take-up. Of this total office space leased in the city, approximately 20% was in the co-working segment, thereby accounting for nearly 0.5 million sq. ft. take-up. The OMR belt witnessed maximum activity due to the presence of the IT/ITeS companies and easy connectivity with other major areas of the city, including the airport.
