disruptingcommercialcealcstate

How the trend is disrupting Commercial Real Estate

New age businesses in India are focussed on cost optimisation from processes, policies and resources to workplaces. With soaring office rents, long-term lease commitments and poor quality offices, both, Millennials and MNCs are moving to co-working Spaces. Not only do they offer highly functional spaces and flexible lease tenure, but also make for an inspiring work experience.
Here’s why it’s time for the commercial real estate to ride with the wave:
Co-working spaces are changing the game
The shared office concept is revolutionising the global commercial real estate market with a whopping 36% surge in members. While Asia leads the co-working market scene, India alone boasts of over 10,000 co-working centres with 5+ million members.

Adapting is the need of the hour
With 17% of India’s premium office space lying unoccupied, co-working spaces pose a huge business opportunity. Converting the under-utilised commercial spaces across the hospitality and retail sectors into co-working centres will only pull the crowd and monetise dead space.
Here’s how the commercial real estate market will adapt to welcome the trend:
Joint Ventures between landlords and co-working space operators
Given the success and profitability of the new age co-working concept, the landlords may co-venture with the space operators. They will join hands to buy, develop and reposition the property with a focus on co-working spaces. It’s a win-win for both the parties.

Redevelopment of outdated spaces
Following the boom, the old and dated office and industrial buildings will open up for redevelopment; to meet the needs of the co-working space operators.

Exploring the untapped markets
There’s a bright possibility of the co-working operators exploring the secondary and regional markets to capitalise on the trend. And if that clicks, the commercial real estate market will follow suit.

According to CBRE report, co-working space leasing in India is expected to touch
10 million sq.ft. by 2020. Clearly, the trend is here to stay and how. With both, Millennials and MNCs migrating towards co-working spaces, it’s high time the brick-and-mortar commercial land owners adapt and profit from this opportunity.

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