This is the fifth 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, and India.
Coworking in Mumbai
Coworking in Mumbai is booming. From less than 10 coworking spaces in 2015 to more than 50 today, demand has consistently outpaced supply. Our analysis has revealed that coworking prices in Mumbai have increased by ~35% since 2016. Why? According to Ramesh Nair, COO of JLL India, “The Mumbai Metropolitan Region, a vibrant mix of both financial and technical talent – coupled with the city’s legendary entrepreneurial spirit – has fuelled a startup boom over the last 3-4 years.” Increasingly, incubators & accelerators are also offering ‘enterprise space’ to foster the growth of their mentee startups. Instead of working at Starbucks, startups, SME’s, freelancers and business nomads are migrating to coworking spaces that offer office space on a flexible & affordable basis. However, it’s not just them that are adopting coworking…
We’re seeing a growing trend of larger enterprises adopting coworking as well. The benefits of choosing coworking over long-term leases are that there is no fixed capital investment, spare capacity can be shed after giving short notice, and such a set-up is more conducive to a mobile workforce. Not only this, WeWork’s India lead, Juggy Marwaha, said that larger firms are also adopting coworking to “understand and incorporate start-up culture into their organizations.” A good example is Zomato, a food-tech company that seats 20 members of its team in a Mumbai coworking space run by Awfis. It seems that the ‘plug-and-play’ benefits of coworking are catching on with bigger players as well.
In this article, we will be sharing insights, trends and projections concerning coworking in Mumbai. 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 Mumbai, 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 across several regions in Mumbai. The overall city average is ~135 USD per dedicated desk per month, making Mumbai the most expensive city to cowork in India. Average prices in other major metropolitan cities are ~100 USD (New Delhi) and ~115 USD (Bangalore).
Does this mean that you can’t find a cheap coworking space in Mumbai? Certainly not. As Mark Twain once famously said, “there are lies, damned lies and statistics”. Looking closely at the numbers, our analysis has found that the most expensive dedicated desk in Mumbai is ~4 times the cost of the cheapest one. Prices vary greatly by amenities offered, age of buildings & their construction quality, and most importantly, location.
The average cost of a dedicated desk in Powai is a steep ~180 USD per month. Users are willing to pay a premium to work out of Powai because it is the heart of the startup ecosystem in Mumbai. It’s also an area with expensive real estate due to high end construction projects in Hiranandani, as well as the presence of IIT Bombay, one of India’s best universities. Our models predict an increase in demand for coworking cafes to cater to a young entrepreneurial student crowd who’ll appreciate working in a buzzing environment. Fun Fact: Did you know you can work out of The Beer Café from 11 am to 6 pm and obtain food and beverages worth the value of your day pass? What a great deal!
To the west of Powai, Andheri (~120-130 USD) is a convenient location to cowork because it is well connected and easily accessible by train. Prices are higher in the Kurla (~165 USD) because the area is dominated by big chains like Awfis, Redbrick & iKeva and they are experiencing high occupancy. WeWork has also recently opened a facility in Kurla. This area is also characterised by a high variation in prices. The same is true of Navi Mumbai (~150 USD), where prices are high because of expensive coworking chains. We expect prices to stabilise in the next 2-3 years once there are more local entrants.
In stark contrast, the Vikhroli-Bhandup-Mulund area (~95 USD) is cheaper and has a low variation in prices because this area only has local players and the big chains haven’t arrived there yet. As such, there is a great deal of price competition due to limited product differentiation. Prices appear low in Colaba (~90 USD) as well as there are not very many coworking spaces there and hence not many price points to analyse. Our analysis has also noted higher demand in the Kandivali-Borivali area (~95 USD).
Overall, we’re seeing a trend in Mumbai towards increased demand for coworking space, not only by SME’s and startups, but also by larger organisations, digital nomads, and freelancers. It’s a growing market with presence of large national and international players.
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