Covid-19 impact: Office space leasing by co-working players to fall 58% in 2020, says report

Leasing of workplace area by co-working gamers is anticipated to fall 58 per cent year-on-year to three.Four million sq ft in 2020 throughout six main cities as a consequence of decrease demand of versatile areas from corporates, in accordance with property marketing consultant Savills India. In 2019, the co-working operators had leased 8.1 million sq ft workplace area throughout six main cities — Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai and Pune.

In its report, Savills mentioned it “expects 3.4 million sq ft of take-up by coworking players in 2020, recording an 11 per cent share of the total office leasing activity”. The total leasing exercise is anticipated to cut back considerably in 2020 as towards 2019, owing to delayed determination making by the occupiers, the marketing consultant mentioned however anticipated the numbers to extend steadily over the subsequent two years.

As per the information, leasing of workplace area by co-working gamers in Bengaluru is estimated to fall at 1.1 million sq ft in 2020 from 2.three million sq ft final 12 months.

In Hyderabad, it’s more likely to drop to 1.1 million sq ft this 12 months from 2.1 million sq ft.

The Delhi-NCR market will see co-working gamers leasing at 0.2 million sq ft in 2020 as towards 1.5 million sq ft final 12 months.

Leasing of workplace area by co-working phase in Pune and Mumbai is estimated to drop to 0.Four million sq ft throughout this 12 months. Pune witnessed 1 million sq ft and Mumbai 0.6 million sq ft absorption in 2019.

In Chennai, 0.2 million sq ft is anticipated to be leased by co-working phase this 12 months as towards 0.6 million sq ft in 2019.

However, Savills India estimated the leasing exercise by co-working operators to extend 42 per cent to achieve 4.9 million sq ft in 2021 over 2020.

The share of coworking area take-up in total workplace leasing exercise is poised to rebound to about 15 per cent share in 2021, just like the 2019 stage.

In the 12 months 2022, the quantity is anticipated to witness an extra 25 per cent annual progress and register leasing exercise of 6.1 million sq ft. “Over the years, shared office space has emerged as a separate asset class, bringing significant cost-advantages to occupiers,” Savills India MD, Research and Consulting, Arvind Nandan mentioned.

At a juncture when co-working areas have been seeing sturdy progress, the outbreak of Covid-19 has modified the principles with social distancing and de-densification of workspace changing into crucial, Naveen Nandwani, Managing Director – Commercial Advisory & Transactions, Savills India mentioned.

“However, we believe that flexible workspaces will reinvent and reposition themselves, emerging stronger on the other side of the pandemic,” Nandwani added.

UK-based Savills started its India operations in early 2016.