This is the sixth 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 USAIndia, and Mumbai. This article concerns coworking trends in Delhi NCR. 

Coworking Trends in Delhi NCR

Coworking Trends in Delhi NCR

The National Capital Region of Delhi (“Delhi NCR”) includes Noida & Gurgaon from neighbouring states Uttar Pradesh & Haryana. There was a significant entry of coworking spaces in this region in 2016, and this year there is an observable expansion of existing players due to increased demand for coworking. Kowrk’s platform alone boasts 40+ unique coworking space listings, up from ~20 listings last year. Nitish Bhasin, Managing Director of Markets of JLL India, said “Among the main drivers of this phenomenon are the increasing number of freelance professionals and consultants in today’s globalised workforce, for whom co-working spaces are now all the rage across Indian metros.” Furthermore, corporates are increasingly turning to coworking space to remain closer to their clients & benefit from the flexibility the arrangement offers.

A report by Colliers International indicates that a large number of key international players are likely to enter this segment. According to the report, Regus is planning to launch a coworking brand ‘Spaces’ in Delhi by the end of this year, primarily catering to customers who are seeking coworking space as opposed to traditional business centre facilities. There is also a rise in ‘markerspaces’ in Delhi for hardware entrepreneurs that benefit financially from such facilities, since co-sharing large spaces with expensive equipment reduces overhead costs. Another key trend in Delhi NCR is a substantial increase in the number of coworking cafes that cater to freelancers and young entrepreneurs.

Our Research

In this article, we will be sharing insights, trends and projections concerning coworking in Delhi NCR. 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 Delhi NCR, India & the world. All data points were converted into USD. Without further ado, lets have a look at our results!

Coworking Trends in Delhi NCR

Our Results

The diagram above depicts the relative cost of a dedicated desk across several regions in Delhi NCR. The overall city average is ~100 USD per dedicated desk per month, ~15% cheaper than Bangalore and ~25% cheaper than Mumbai. The national average dedicated desk cost in India is ~115 USD.

How can the average cost in Delhi NCR, the political capital of the country, be less than the national average which includes price points from tier 2 and tier 3 cities? Our analysis indicates this is the case because of a large number of highly priced coworking chains in Mumbai and Bangalore.

The Delhi NCR startup ecosystem was off to a slow start in 2015, receiving the lowest amount of Series C funding as compared to Mumbai and Bangalore. However, this trend quickly reversed in 2016, when Bangalore, dubbed as India’s ‘Silicon Valley’, lost out to Delhi NCR in terms of quantity and size of startup funding. At the same time, the Delhi NCR property market was severely impacted by demonitization, with the market seeing negative growth in demand (-29%) and supply (-73%) in 2016 when compared to the same period in 2015. Bangalore property rates, in contrast, were least affected by demonitization. Taking these complex market forces into account, our models have found that while coworking prices in Bangalore have shot up by ~50% from 2016 to 2017, prices in Delhi NCR have largely remained constant.

Our analysis has also found that, among tier 1 cities, Delhi NCR has the least variation in prices among the different locations, with the price floor standing at ~70 USD and the price ceiling at a hefty ~180 USD per dedicated desk per month. Although a variation in prices of over 100% might at first seem high, it is not so in comparison to Bangalore, where the cost of the most expensive dedicated desk is over seven times more than the cost of the cheapest one. The obvious question is: Why does Delhi NCR have such a low variation in prices?

We have identified that the low variation of prices is due to the presence of fewer high-priced international coworking chains in Delhi NCR as compared to other cities, and stiff competition with limited product differentiation from local players. Delhi NCR is particularly price competitive because of the high concentration of coworking spaces in specific pockets of the city, specifically Central Delhi (~120 USD),Greater Kailash (~85 USD), Lajpat Nagar (~110 USD), Noida (~90 USD) & Gurgaon (~110 USD).

Noida & Gurgaon are “attracting companies because of their lower rental costs and an enormous consumer base that offers huge opportunities for service businesses.” Gurgaon enjoys high coworking growth because of a large number of MNC’s in the area. Noida, specifically, is booming with 7 new coworking spaces opening in the last 2-3 years, all of whom are local players. But beware, poor infrastructure in Noida poses a challenge, specifically lack of public transport, regular electricity outages, and poor internet connectivity.

Our analysis indicates that Noida is ~10% cheaper than Delhi on average, and Delhi (including prices in East & West Delhi) is ~10% cheaper than Gurgaon. If travel is not a constraint, we recommend you look for a space in South Delhi instead of Gurgaon, as prices in South Delhi are ~20% cheaper. Fun Fact: Over a year, you can get almost 3 extra months of dedicated desk space in South Delhi than in Gurgaon!

The largest concentration of coworking spaces is in South Delhi, which has 15+ unique spaces, and hence we split up this area into three geographical hubs for the purposes of our Price Heat Map assessment. The high concentration of spaces in this area is due to its proximity to IIT Delhi, a leading technology-focused tertiary institution in India. Kowrk frequently assists a number of startups to find optimal coworking space in South Delhi. Contrary to our expectations, coworking spaces have not yet established themselves around the North Campus of Delhi University. If you’re looking to start a new coworking space or expand your coworking chain, why not explore this area? Let us know your thoughts in the comments section below!

In contrast to South Delhi, East Delhi (~85 USD) is primarily a commercial hub, lacking educational institutions and the startups that often mushroom around them. Hence, demand in East Delhi is primarily driven by SME’s, as opposed to startups or freelancers.

West Delhi (~90 USD) is marginally pricier than East Delhi, with only 2 coworking spaces operating in that part of town. In 2016, there were no operational coworking spaces in West Delhi and we had suggested that operators should expand there. It seems that our recommendations are being implemented by our smart readers!

Finally, our results also indicate that only ~1/6th of coworking spaces in Delhi NCR offer 24/7 access, compared with ~1/3rd in Bangalore, ~50% in Mumbai and ~85% in Hong Kong (where our headquarters is based). The reason why coworking spaces in Delhi NCR rarely offer 24/7 access is that of general safety & security concerns, and because it is more expensive. If your company expects employees to regularly pull all-nighters at the office, it might be difficult for you to find a coworking space which can accommodate this culture in Delhi NCR!

Any questions? Comments? Leave your thoughts below.

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