The leases have a total tenure of 20 years, including an initial term of 10 years with an option to extend it by another 10 years unlike usual tenures of three, five or nine years. “With our rapid expansion, we are continuing our journey towards opening more spaces that inspire people to be creators, and foster the spirit of collaboration,” said Karan Virwani, chief executive officer at WeWork India.
In October, WeWork’s India arm had picked 0.5 million sq ft of office space in one of the largest deals by a co-working company across the Mumbai Metropolitan Region and Bengaluru. “Traditional office setups include exorbitant real estate expenses amounting to 9-12% of overall operating costs whereas shared, flexible spaces can save 20-25% of real estate costs. India will emerge as one of the largest markets for shared workspaces in the coming years,” he said.
The company has been picking up properties aggressively in a bid to expand the number of facilities to over 20 centres across key markets by December 2018. WeWork will double it’s seats across Delhi, Mumbai and Bengaluru, and reach 35,000 desks by the end of the year.“At the beginning of 2018, we set out with the aim to double our locations by the year end. We are well on our way to achieving this, and we plan to expand to booming cities such as Pune, Chennai and Hyderabad by next year to reinforce this commitment,” said Virwani. The firm that started operations last year has so far leased 1.5 million sq ft across 12 office spaces in Mumbai, Delhi and Bengaluru, with over 15,000 desks.
Co-working, or collaborative, offices is a relatively new idea in India and is gaining momentum across key property markets due to lower costs and flexibility. As per estimates, co-working spaces witnessed nearly a million sq ft of absorption last year across the country. According to CBRE South Asia data, co-working and business operators leased about 3.3 million sq ft space in the first three quarters of 2018.