A young scion at one of India’s largest commercial space developers is challenging WeWork, a heavily funded US startup focused on technology-enabled shared office spaces and which is finalizing its entry into the country.
The 26-year-old Sidharth Menda of Bengaluru-headquartered RMZ Corp is starting up a community workspace venture for millennials, called CoWrks, with likely financial backing from Middle East sovereign wealth manager Qatar Investment Authority (QIA).
Shared or co-working office communities are gaining popularity with the number of independent professionals among the urbanized workforce rising rapidly . Independently working millennials, those who are starting up or working with small, emerging businesses, are redefining the office space market.Almost one-third of the 40 million sqft Indian office space absorption last year (more pronounced in cities like Bengaluru) involved transactions for under 10,000 sqft, driven by startups and independent businesses.
The Menda family , owners of RMZ, one of the country’s top four commercial property developers, has made initial investments to kick-start CoWrks, which will have 10 locations across Bengaluru, Mumbai, Gurgaon and Chennai by March next year. QIA is expected to buy into the company in the next few quarters as the young Menda prepares an ambitious road map to take on New York-based WeWork, which has raised $1 billion from Goldman Sachs, JP Morgan Chase and Fidelity , among others. Israeli entre preneur Adan Neumann-led WeWork -valued at $16 billion -manages over 5 million sqft with 80,000 people working across 23 cities in the US, Europe and Asia.
QIA has been a large investor in RMZ’s office space portfolio, topping 20 million sqft and has supported growth through acquisitions.
CoWrks plans to manage 2 million sqft of shared office spaces across top 6 cities within a year, before charting an international foray . “We plan to have about 200 locations globally in the next four years providing co-working spaces that are productive, emotionally gratifying and financially sensible,” CoWrks CEO Menda told. “CoWrks is an office space for millennials who want everything in an on-demand basis, where they can benefit from being part of a large and like-minded ecosystem,” he added.
CoWrks will offer work stations that are flexible, dedicated and private. In Bengaluru, for instance, the monthly rental for flexible work stations will be Rs 8,500 per person, while dedicated stations will cost Rs 11,500 and private studio offices come for Rs 22,000 per person. The first CoWrks location being readied in Bengaluru is inside the RMZ Ecoworld business park located in one of the hottest micro-markets in the city’s tech corridor. The first Mumbai centre will be in BKC, followed by Lower Parel and Bandra. While the first location in Bengaluru is almost1.60 lakh sqft, the subsequent ones will range between 40,000 and 80,000 sqft. “The profile of our clients and the design ethos of our locations will vary . For instance, it will be financial services crowd in Mumbai BKC and entertainment and performing arts related people in Bandra or Lokhandwala,” Menda said.
CoWrks will be landlordagnostic and operate from premises that are owned by RMZ and other developers.
“Our competition is going to be with WeWork as we plan to scale up across four continents -North America, Europe, Asia and Australia. Both of us are going after the same encore, tech-enabled co-working offices for the young,” Menda said. Global investors have taken fancy to shared office spaces as an emerging asset class, driven by faster return on capital employed and better unit economics. “Co-working is unorganized in the country but over the next two years, it will change as startups and independent workforce in urban areas realize the advantage of lower rentals and yet having access to the facilities that an office park provides,” Menda argued.
CoWrks’ initial overseas forays is likely to cover Asian cities like Singapore, Manila and Jakarta. WeWork entered Asia through Hong Kong and Seoul.
The six-year-old WeWork is finalizing India entry and has held joint venture talks with Embassy Office Parks, a cross-town rival of RMZ. WeWork co-founder Neumann, who visited the country in recent months, is deciding between a joint venture and independent foray in India with one of the largest pools of young, urbanized workers in the world.
Co-working spaces differ from boutique business centres like Regus, which mainly provides a professional address.Co-working offices are tech-enabled real estate platforms (most shared services are driven by community apps), offering freelancers, consultants, startups and even innovation teams of large corporations a networked, like-minded ecosystem.
Source: The Times of India
