This is the seventh article of our Price Heat Map Series 2017. The first article of this series explained our methodology and outlined coworking trends around the world. We have also written about coworking trends in Hong Kong, the USA, India, Mumbai, and Delhi NCR. This article concerns coworking trends in Bangalore.
Coworking Trends in Bangalore
Bangalore has always been a hotbed for startups. A recent report by Colliers International found that Bangalore, Mumbai and Delhi NCR collectively host 70% of the startups in India, which has 4,750+ startups as of date and is expected to increase to 12,000+ by 2020. Fun Fact: Bangalore is host to the winner of our KoolestKoSpace Competition 2016, Bhive Workspace!
Our regression analysis has found a strong correlation between demand for coworking space and the presence of startups within a particular city. But we must add a caveat here. Although this correlation exists, we are by no means suggesting that demand for coworking space is fuelled solely by startups.
According to The Economic Times, “coworking spaces are not just habitats for startups but also fast becoming workplaces for large, established companies.” Foreign companies are also jumping on the coworking bandwagon, enticed by the flexibility and cost efficiency of plug and play office space. “Mumbai and Bangalore offer by far the best opportunity for creating coworking spaces targeted at corporate firms”, according to JLL. At Kowrk, we regularly assist SME’s, freelancers, and large corporate bodies to find suitable shared workspace in Bangalore, India, and across the world.
Want to learn more about coworking trends in Bangalore? Take a look at our research and our results below.
In this article, we will be sharing insights, trends and projections concerning coworking in Bangalore. Our analytical model included the average cost of dedicated desks, tourism trends, cost of living indexes, commercial rent indexes, and other global trends. We chose dedicated desk prices to be the key reference point as these are consistently available price points across Bangalore, India & the world. All data points were converted into USD. Without further ado, lets have a look at our results!
The diagram above depicts the relative cost of a dedicated desk in several regions in Bangalore. Our analysis indicates Bangalore has the highest variation of coworking prices in India. The cost of coworking depends primarily on location since prices vary greatly between prime and non-prime locations. The exact opposite is true of Delhi NCR, where coworking prices between prime and non-prime locations vary far less. Fun Fact: In Bangalore, the most expensive dedicated desk is ~8 times the cost of the cheapest one.In Delhi NCR, the most expensive dedicated desk is only ~3 times the cost of the cheapest one. Numbers don’t lie!
Team Kowrk also did this analysis last year, which begs the question: Has anything changed since 2016?
In 2016, the majority of coworking spaces in Bangalore were concentrated in four locations: HSR Layout, JP Nagar, Koramangala, & in the city center. This year, coworking spaces have cropped up along the outskirts of the city (e.g. Whitefield) as a result of ever-growing demand. Coworking chains opening up in the outskirts of the city in response to growing demand is not exclusive to Bangalore. In Delhi NCR, we’ve seen new coworking spaces crop up in West Delhi, an area that had no coworking spaces in 2016. We project that by 2020, demand will drive the expansion of coworking spaces in the outskirts of tier 1 cities.
Bangalore has seen an overall ~50% rise in average prices from ~75 USD per dedicated desk per month in 2016 to ~115 USD this year. Why? It’s because of the entry of high-priced competitors. New York based WeWork opened a 140,000 sq. foot facility with a capacity of 2200 members in July 2017 on Residency Road, one of the most prestigious addresses in Bangalore. Karan Virwani, Director of WeWork India, said “the reason we chose Bengaluru as our first location is because it’s demographically the most diverse city with…a very robust startup ecosystem.” To learn more about WeWork’s facility, click here!
In 2016, Koramangala was the most expensive area in Bangalore to cowork, commanding average rates of ~90 USD. Although prices have risen ~20% in 2017 to ~110 USD, the most expensive location to cowork in Bangalore in 2017 is, without doubt, the Ashok Nagar-Shanthala Nagar-MG Road area (~210 USD). Furthermore, this area has a very high variation of prices due to competition between lower-priced local operators and high-end international coworking chains. The most expensive branded chains in the area like IShareSpace, SoloCubes & Numa Bengaluru command a hefty rate of up to ~300 USD. Kowrk Top Tip: If you’re based in Koramangala (~110 USD) and wish to find a cheaper coworking space, try looking in HSR Layout (~90 USD), which is not too far off!
Last year, we found that prices of hot desks in Bangalore were higher on average than the prices of dedicated desks. This was a highly unusual observation since dedicated desks are consistently more expensive than hot desks across India and throughout the world. The outcome of our analysis in 2017 has revealed that hot desk prices in Bangalore have normalized since 2016 and are now consistently less than or equal to dedicated desk prices.
Our research has revealed that a number of coworking spaces have sprung up in the Brookfield-Whitefield-HUL area (~100 USD). This self-sustaining suburb has come to favor as a result of its IT Park, with large companies such as Intel, Wipro, SAP and TCS present there. Our projections indicate that prices will rise in this area as it becomes better connected via public transport. We expect more coworking spaces to open in this area.
In our analyses of other cities like Delhi and Mumbai, we found a positive correlation between the presence of top-tier higher education providers (Indian Institutes of Technology and Indian Institutes of Management), the depth of start-up ecosystems & the corresponding growth of coworking in those areas. Contrary to our expectations, we have found a low concentration of coworking spaces near IIM Bangalore. In the future, we expect more coworking spaces to open up around the university.
Finally, our analysis has found that very few coworking spaces in Bangalore offer virtual office services. A few small-to-medium sized coworking spaces offer VO services upon request, but do not openly advertise this. Larger chains like iKeva, Evoma, and DBS Business Centre offer VO services. We advise you to contact them directly to confirm the specific rates depending on your requirements.
In short, prices in Bangalore have risen dramatically over the last 12 months. Demand is still outpacing supply and coworking chains are scrambling to increase their capacity to meet the insatiable appetite of the Indian coworker.
With an ever-growing selection of coworking space in an ecosystem filled with startups hungry for success, the only thing left to say is bon appétit!
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