WeWork, the global co-working unicorn, that provides shared working spaces for freelancers, entrepreneurs, startups and small businesses, has just leased its first office space in Mumbai in the first week of January 2017. According to CB Insights, in the latest round of funding by Jinjiang International Group during October 2016, WeWork was valued at US$16.9 bn. Among its investors include global institutional investors such as JP Morgan Chase, Harvard Management Company, Goldman Sachs, Fidelity Investments, Wellington Management, Hartford Funds Management, Legend Holdings and Hony Capital.
The firm has sub-leased an entire building in G Block, BKC having 123,224 sq ft (carpet area) of office space from ENAM Financial Consultants along with exclusive rights to use 170 car parking spaces. ENAM had initially purchased the plot from BKC on a long-term lease basis in 2006 and subsequently constructed and received part Occupancy Completion till 12th floor in 2010. It further added the floors 13-16 by 2013. However, the domestic financial services firm never occupied the building and was looking for a buyer or tenant over the last 3 years. WeWork has contracted to pay an initial rent of INR 4.26 Cr per month implying a rent of INR 346 per sq ft per month on carpet area basis and nearly INR 226 per sq ft per month on leasable area or BUA basis (including parking space, lobbies and passages) for a period of 10 years. If we consider an average efficiency of 100 sq ft per workspace, WeWork should be able to host nearly 1,230 work-desks along with common breakout areas, conference and meeting rooms. This translates to a monthly rent of nearly INR 34,615 for a work-desk. Apart from the office rent, WeWork would have to furnish the space and maintain it as an operating business as well. Hence, the services are unlikely to be offered cheap!
Among the Indian firms that are offering co-working spaces in Mumbai is Awfis & 91 Springboard. Awfis had recently leased its 7th co-working office space of 17k sq ft at INR 70 per sq ft per month in Cyber One in Vashi during Nov 2016. Other Co-Working options that have opened in Mumbai include The Playce at Mulund West, The Hive at Khar West, Our First Office at Nariman Point, Bombay Connect at Bandra West and Geekout at Andheri West. However, it would be WeWork’s first co-working office space in Mumbai and that too in the heart of Mumbai’s financial hub.
Co-working as a workplace option is gathering momentum in several gateway cities globally, and increasingly more corporations have already started to realise that it offers a great potential for fostering innovation. According to Citizen Space, one of the first Co-Working spaces in the US, it relies on five basic values: openness, collaboration, community, sustainability and accessibility. Breaking from the traditional hierarchical office plans, it offers an innovative office environment – the future workplace.
The office market in India just got a bit more exciting!