Co-Working spaces emerging as a gateway to the investment opportunity of 2017

The Indian real estate market has seen different phases and trends and one of the most interesting of them has been of co-working spaces. Real Estate as an investment has always excited the investors and it is taking a new growth parameter in India with this concept. India as an economy is now being driven by entrepreneurs who look for budget oriented along with a flexible work environment. At such a point, the investment in co-working space is definitely expected to see an upward trend.

How Co-working Spaces can bring change in Indian Real Estate Business?
The investors in today's market are looking for a smart investment opportunity. This becomes the prime reason why small scale entrepreneurs, investors and buyers find investing in co-working spaces a logical investment. A small amount of capital investment with low risk is what this investment is. With cities like Delhi NCR, Bengaluru, etc. becoming the prime hubs businesses, the construction of such spaces is a favorable investment for many builders as well. Globally if we see, researches have shown that in past five years, co – working spaces have shown a remarkable growth rate across the globe. From an investor point of view, this makes it a very well- structured investment product. There is a wealth of opportunities in this kind concept. To capture this opportunity, the major Real Estate players have come with investment plans that require a very nominal initial capital and strategies that ensure good and reliable returns on the investment that you make. For example, if an individual wants to invest in a lockable space with the same kind of capital involvement, he walks home with a lock and key along with a liability to maintain and further lease out the property for the entire tenure. On the other hand, an investor involved in a virtual space with an equal amount of capital lives with a peace of mind of minimum guaranteed assured return on his investment ranging between 10 – 12 % per annum. Till the time he gets the possession and even after that he has a mental peace of not leasing it out on his own. In fact, he/she enjoys minimum assured rentals as per the current market standards for a decade in which the leasing partners like JLL play a major role.   

Examples:

Regus- Known for providing work-spaces for everyone from entrepreneurs to major global businesses, Regus has 95 locations in India, 900 cities globally and 3000 locations worldwide spread in 120 countries. With offerings as well as investment opportunities like office space, co-working space, virtual office, meeting room, businessworld and work-space recovery Regus specializes in providing the right work-space for your business depending on your budget. As an investor, the investment starts with as low as the cost of a single workstation.

Bar Works: Founded in 2015, Bar Works also offers an excellent opportunity to invest in structured shared workplace deals with returns of up to 16% a year. It has been a fast expanding chain of affordable and vibrant co – working spaces. The investment varies from country to country depending on the location.

WeWork- It is another New York Based startup formed in 2010 that offers serviced office spaces to travelling entrepreneurs. As per The Wall Street Journal, it’s worth now is around $16 billion.

With such investment gains it is unsurprising that investors want a piece of the “sharing economy” pie. The beautiful and affordable concept of Co-working spaces and serviced offices combined with the real estate investment opportunities with good return comes out as a win win for everyone. They are expanding in US, UK and UAE. In India, the concept is gaining pace and popularity. Typically in the natural Real Estate market of India, the commercial movement and office spaces used to fetch a lot of capital blockage infrastructural development cost, electrical, air conditioning, etc. Co-working concept helps you to spread the burden of capital over a number of investors rather than some huge investors coming in and acquiring lakhs of sq. ft in commercial hubs, IT space, etc. Real Estate market has now graduated to a level where it wants multiple investor profiles involved to pool in the capital required to create the internal infrastructure required and also take care of the basic capital required to ring up this external infrastructure. This wave of co-working spaces is edging into the market and targeting the investors of varied investment sizes. While entrepreneurs and smaller businesses have been attracted by the lower capital outlays, Real Estate investors see big assured return in this investment.