This is the fourth article of our Price Heat Map Series 2017. The first article of this series explained our methodology & outlined coworking trends around the world. Our second article analyzed the most recent trends in the Hong Kong coworking ecosystem. Our third article looked into coworking prices in the USA.

Price Heat Map - Coworking Trends in India

Coworking is HOT in India right now. According to India’s JLL chief Ramesh Nair, “Co-working is expected to receive $400 million in investments by 2018 and is set to grow by 40-50% to reach over 1 million sq. feet of leased ‘alternative’ work spaces by the end of the year in India.” At Kowrk, we have personally witnessed this trend on terra firma. We’ve seen the coworking chain Awfis recently obtain $20 million USD in funding. New York based WeWork kicked off its operations in India with a 140,000 square foot facility based in Bangaluru, back in July this year. Evoma, iKeva, and Vatika Business Centre are giving stiff competition to Regus. It looks like all the big players are in the market and are expanding quickly, which begs the question; will prices fall due to excess supply in the future?

Our models indicate that this is unlikely. Firstly, we’re seeing rapid urbanization in India. JLL research predicts that “42% of the country’s population will be living and working in urban centers” and therefore there will be increased demand for shared workspaces. Secondly, our research indicates the USA has an approximate aggregate of 27 million square feet of shared workspace. India has triple the workforce of the USA, yet less than 1 million square feet of coworking space. Rather than asking whether prices will fall in the future due to excess supply, we think the better question is whether supply will meet ever-growing demand. Finally, our research shows that freelancers and digital nomads are starting to adopt coworking, in addition to early adopters, startups & SME’s.

Our Research

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

Price Heat Map - Coworking Trends in India

The diagram above depicts the relative cost of a dedicated desk across 12 cities in India. The overall national average is ~110 USD per dedicated desk per month. The following are the key observable trends for each city.

The Tail Ends

Mumbai (~135 USD) is the most expensive city for coworking in India on average. We’ve seen a huge increase in coworking spaces in Mumbai, up from less than 10 spaces in 2015 to over 50 spaces today and counting. Demand has still outpaced supply since coworking prices in Mumbai have increased by ~35% since 2016.

Pune comes in at ~90 USD, just under 100 miles away from Mumbai. You might think, awesome, lets jump on the highway and get there in under an hour. Unfortunately, the commute is more like 3 hours…traffic and roads are insane!

Bhopal (~50 USD) is the cheapest city to cowork in India. Low cost of living and relatively few spaces in the city are the driving factors.

For more information about coworking in Mumbai, follow our blog & read our upcoming articles!

Bangalore

Bangalore has seen a ~50% rise in prices from ~75 USD in 2016 to ~115 USD this year. Why? It’s because of the entry of high-priced competitors. Our analysis indicates Bangalore has the highest variation of coworking prices in India. The cheapest price point comes in at ~40 USD and the most expensive branded chains command a hefty rate of up to ~300 USD.

For more information about Bangalore, stay tuned! We’ll be releasing an exciting feature soon…

Delhi NCR

Delhi NCR (~100 USD), in contrast to Bangalore, has the least variation of coworking prices in the country. Prices range from ~70 USD to ~180 USD. Why is there a limited variation of prices between prime locations like Connaught Place and coworking space on non-prime property?

We’ll be unearthing the secrets of the Delhi NCR coworking market in a subsequent article. Arriving shortly…

General Observations

Our study has found that cities such as Bhopal (~50 USD), Jaipur (~70 USD), Goa (~75 USD) & Indore (~85 USD) are growing and are seeing a rapid increase in coworking spaces opening up. Among tier 2 cities, Ahmedabad (~100 USD) is the most expensive. Why? It’s because the city is home to an IIM that is incubating & fostering entrepreneurship. In fact, our analysis shows a positive correlation between the depth of startup ecosystems, the presence of top-tier higher education providers, and the cost of coworking.

Our forecasts indicate more coworking spaces will open up in tier 2 and tier 3 cities in India, hand-in-hand with the establishment of top management and technology institutions. 7 new IIM’s and 7 new IIT’s have opened in the last 2 years. In the last 10 years, 13 new IIM’s have opened in tier 2 and tier 3 cities. As these institutions mature, so will startup ecosystems, and thus a larger coworking market will develop in these cities.

Only time will tell whether our prediction is correct. Stay tuned for our analysis in 2018!

Any questions? Comments? Leave your thoughts below.

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