Rental Growth in Major Cities
Mumbai has experienced a significant increase in the average monthly rentals for coworking spaces over the last four years, with a 27% rise, followed by Gurgaon with a 19% increase, as per a recent MyHQ by Anarock report.
According to the report, six major cities were analyzed: Bengaluru, Delhi, Mumbai, Gurgaon, and Noida.
Rental Statistics
In Mumbai, the average monthly rental cost for a flex space seat was Rs 15,900 in FY 2024 compared to Rs 12,500 in FY 2020.
Gurgaon saw a 19% increase, with rentals rising from approximately Rs 8,500 per month per seat in FY2020 to approximately Rs 10,100 per month per seat in FY2024.
Delhi's flexible workspace rentals increased by 18% between FY2020 and FY2024, from Rs 10,000 to approximately Rs 11,800 per space per month.
Bengaluru's average monthly rent for flexible spaces increased from Rs 7,800 per seat in FY2020 to Rs 9,000 per seat in FY2024, marking a 15% increase.
Noida's average monthly rental price for flex spaces rose by 14% over the past four years, from Rs 6,500 per seat in FY2020 to Rs 7,400 per seat in FY2024.
Industry Perspective
Utkarsh Kawatra, Senior Director of myHQ by ANAROCK, stated, "In recent years, the Asia-Pacific area has become a significant market for coworking spaces, and demand is rapidly increasing. Japan, China, India, and Hong Kong are among the major cities experiencing rapid expansion." He added, "India, as a hub for startups across various sectors and industries, is witnessing a steady demand for flexible, economical workspaces."
Market Trends
In the current fiscal year, coworking spaces accounted for 18% of the office supply in the top seven cities’ office leasing market. The flexible office real estate market is projected to grow from 55 million square feet to 100 million square feet by 2030, according to a MyHQ by Anarock report.
Financial support for coworking spaces has also been robust, with increased funding post-COVID-19.
Return on Investment
An average coworking space of 20,000 square feet can achieve an internal rate of return between 40-70%. The report also notes that up to 70% of businesses are adopting a hybrid work style.
Future Projections
Two out of three industry experts anticipate that coworking spaces will be more in demand than traditional office spaces by 2030. Additionally, hotels and food and beverage establishments are exploring coworking spaces to boost revenue from their daytime unsold inventory.