Mumbai: Shopping malls, particularly underperforming ones, are becoming a favourite destination for setting up shared office spaces. Cheaper rentals, availability of large spaces and easier access to recreational facilities in shopping complexes are luring co-working office providers to malls. For co-working office providers such as Awfis Space Solutions Ltd, IWG Plc, The Hive and SmartWorks, shopping complexes provide one of the fastest and efficient ways to open co-working offices.
Apart from getting attractive deals, such retail destinations offer the right setting for an informal environment, a theme most co-working spaces thrive on, said executives of these companies.
Shared office provider SmartWorks Ltd is in the process of converting Pune’s Central Mall, which has been shut for the past two years, into a co-working office.
Nitesh Sarda, founder, SmartWorks, said the company is currently in talks with more than 20 landlords of the 120,000 sq. ft shopping complex to convert it into a co-working office.
He expects to start work on the complex in two-three months.
“Firstly, malls are now open to the idea of converting into a commercial space. There are a lot of collaborative areas that are designed in a mall which is quite attractive. Location is a big factor and some of the older malls are located right in the residential pocket,” said Sarda.
Awfis Space Solutions has opened co-working offices at five shopping malls in Mumbai, Pune and Gurugram.
The firm has chosen malls where footfalls have significantly dropped in 2-3 years or are under-utilized areas in a shopping complex to open shared office spaces.
For instance, Awfis operates a 30,000 sq. ft co-working office on the sixth floor of Ambience mall at Gurugram. Besides, it has also opened centres each in Raghuleela and Heera Panna mall in Mumbai and Nucleus mall in Pune.
According to Sumit Lakhani, chief marketing officer, Awfis, the higher floors of mall which are less popular among retailers provide an attractive deal to set up such shared offices.
“The rental difference between ground floor and higher floors is 35-40%. Access to parking spaces and security system are also well taken care off. Besides, most malls are generally located in some of the best locations around,” he said.
Luxembourg-based International Workplace Group (IWG) operates four Regus business centres out of shopping complexes in Delhi, Noida, Bengaluru and Chennai.
It has also recently opened a co-working office under the brand SPACES at City Centre mall in Chennai.
“Co-working is still looked at as an informal work space. Several firms may not like to associate with a mall as a workplace but for a co-working office, malls provide the right setting. Abundant parking spaces, along with a good amount of food and beverage areas within a mall, becomes a good fit for setting up co-working offices,” said Harsh Lambah, country manager (India), IWG.
For developers, leasing out to such office providers allows them to utilize areas in a shopping mall that are less popular among retailers. “A mall makes a whole lot of sense for co-working office providers. They don’t have to invest anything on food, entertainment and other facilities. Besides, for malls, it provides captive customer inside a mall,” said Pankaj Renjhen, chief operating officer, Virtuous Retail, part of private equity firm Xander Group.

Xander’s co-working office venture, The Hive, operates two centres at its two VR malls in Bengaluru and Chennai.

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Amit Ramani says we decided to build centres with a capacity of 350-400 seats, to facilitate community interaction and enable members to collaborate, exchange ideas and create a productive work environment.

Shared workplaces attract people from diverse backgrounds and provide just the right environment for members to connect with like-minded individuals. When we started operations in 2015 with our very first centre, our objective was to redefine the traditional office model and integrate workplaces with a sense of community on the back of collaboration and enriching experiences.

Our learnings from operating this small 70-seater centre were critical for our long-term business success. We gained two major insights from this experience—the optimal size for a co-working space to trigger community engagement and the network that is needed to sustain it in the long run. The idea behind this small centre was to foster personal interactions between members at such a level that everyone would know each other on a first name basis.
However, we realized that a small space limited our capacity to design appropriate activity-based settings like collaboration zones, meeting pods break-out zones that foster collaboration. This centre with its limited seating capacity did not work well for us even on unit economics. It was with these learnings that came our click moment and we decided to build centres with a capacity of 350-400 seats, an optimum workplace size to facilitate community interaction and enable members to collaborate, exchange ideas and create a productive work environment. This size also allows ample space to experiment with designs and collaboration zones within the centres.

In the last few years, we’ve placed immense thrust on building a cohesive reach of our centres within 10 minutes of driving radius across cities in India. Today, Awfis stands strong with a robust network of 55 centres across nine cities in India and a strong community of 15,000 professionals.

There was one moment when fate turned their way, a moment that they can look back upon and say, that was when it started.

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Shared workplace start-up Awfis Space Solutions will use Sequoia Capital’s $20 million investment to fund its expansion plans

Awfis Space Solutions, a start-up that provides shared workspaces, has raised $20 million from Sequoia Capital India to fund its expansion plans.

Awfis, which operates 21 workplaces across the National Capital Region (NCR), Bengaluru, Mumbai, Hyderabad, Pune and Kolkata, will use the funds to expand to more than 100 centres in two years, the firm said. It plans to raise the total seat count in its centres to 35,000 from about 7,500 now.

Sequoia’s investment displays the growing investor interest in the area of shared offices, which has seen a number of branded co-working facilities mushroom in metropolitan cities in the past few years.

Currently, the biggest entities in the segment are 91springboard (present in NCR, Hyderabad, Mumbai and Bengaluru), Y Combinator-incubated Innov8 (Delhi, Chandigarh and Bengaluru) and InstaOffice (Gurgaon, Bengaluru and Delhi), besides smaller region-only firms like CoWork India (Bengaluru), AltF Coworking (Delhi and Gurgaon) and Blume Ventures-backed BHIVE (Bengaluru).

WeWork, a leading shared workspace provider with a presence in 15 countries, has also entered the subcontinent.

The New York-based firm will open its first centre in Bengaluru this year and has leased a 16-storey building, representing almost 190,000 sq. ft area, in Mumbai’s Bandra Kurla Complex, Mint reported in January.

Awfis, which opened its first facility in Delhi in 2015, is a joint venture between Amit Ramani, the founder and managing director of real estate design consulting firm Nelson India, and The Three Sisters: Institutional Office, a family-run investment firm managed by Yes Bank founder Rana Kapoor’s daughters.

Both parties had invested $11 million in Awfis in April 2015.

Awfis has since expanded its footprint to six of the eight metros in India, with a facility in Chennai expected to come up in three months, CEO Ramani said.

He said the focus is to place smaller co-working centres in the vicinity of the user rather than to have fewer big facilities. “We have identified a sweet spot of 350-400 seats per centre, where our unit economics works and this kind of scale gives us the best-suited setting for a community-based environment,” Ramani said.

Awfis co-working centres are typically of the size of 15,000-20,000 sq. ft. and offer facilities like high-speed internet, video conferencing and printing and have cafeterias.

The space is rented out on a per-seat per-month basis. One seat is priced at Rs3,500-5,500 under the flexi plan (where the seat position is not defined) and Rs8,500-10,000 for a fixed seat. A seat in a private cabin starts at Rs13,000; besides clients have the option of booking an entire cabin or meeting room.

Awfis takes a property on lease typically for a five-nine year period and invests in its renovation and refurbishment. It has also deployed what it calls a ‘managed aggregation model’ wherein the property owner offers its property to Awfis for no upfront cost and takes a higher share of the revenue.

Ramani said that over 50% of its facilities are on the latter model and expects to sign up at least 70-80% of the new properties on this model. He claims that Awfis spaces see about 90% occupancy.

(This Awfis coverage appeared on April 26, 2017 in Mint newspaper. You can access the original story here: http://www.livemint.com/Companies/0FWcMgxPD02MyvDjl2gOEL/Sequoia-Capital-invests-20-million-in-Awfis-a-shared-works.html )