Manas Mehrotra, Chairman, 315 Work Avenue

Manas Mehrotra is the Chairman of 315Work Avenue, a leading co-working company. Manas is also the Managing Director of NestaVera Group of Companies, a well-diversified group having businesses spread across several sectors and verticals like education, real estate, co-working, trading, and Angel Funding. He has been an investor in real estate since the early part of his career. Portfolio of Manas consists of various commercial projects and residential projects across the country. He is also a Trustee at Greenwood High International School. Manas is also a Director at Darshita Exim – a company involved in International Trading business, which has exposure in China, Hong Kong, Singapore, Dubai, and the USA.

 

The past few years have witnessed an unparalleled success for the co-working juggernaut in India. This accelerated growth has stemmed from the revolutionary shift in the Indian traditional workspace to a more flexible, accessible and affordable co-working space. The present disruption due to Covid-19 is seen as temporary as the co-working industry is expecting a resurgence as the economy emerges out of lockdown. However, medium- to long-term fundamentals remain sound as corporate occupiers seek out alternative options to reduce costs and capital expenditure. As a result, even the most conventional occupiers are now seeing the merit in co-working. The post lockdown scenario is set to bring in a wave of new opportunities for the co-working players. There will be a lot of focus on distancing measures and communication protocols to ensure a safe working environment.

Flexible workspaces are a practical choice as companies rise up to face the new normal. The key aspect that will favour this segment post-COVID-19 apart from the premium facility management is de-densification. The segment will also see the adoption of high levels of hygiene and other measures that will attract businesses. It will also attract companies previously not exposed to co-working and its benefits. Co-working segment is best placed to cater to these flexible demands.

With the impact of the pandemic taking effect during Q2 2020, a decline in absorption was seen across all the markets. As per a recent report, while the five major cities of Bengaluru, Mumbai, Chennai, Hyderabad and Kolkata saw absorption of approximately 4.42 million sqft office space during Q2 2020, depicting a steep decline of 54% over the absorption observed in Q2 2019. However, notwithstanding the crisis at hand, Bengaluru continued to lead the way with 45% share of the total absorption in these five cities.

There are many important factors that explain why co-working will bounce back post-pandemic:

Work from home has its own challenges 

While work from home model would have worked well in the lockdown, many companies, however, may not want it as a culture. Many business verticals and functions still require employees to work in an office setting. The overall ecosystem needs to be conducive for an employee to be productive while working from home. While WFH may look appealing as a concept initially, yet, in due course, it may impact operational efficiencies and productivity as managing work-life balance for employees might emerge as an area of concern. Work from home may co-exist, but office space will not lose its importance as a strategic tool for corporate culture development and a source of competitive advantage.

Large enterprises will seek smaller spaces 

Another win for flexible workspaces will also come from the fact that companies will have to practice social distancing within their campuses, which means they might have to station some employees in different locations. Companies will strive to be agile and prefer to build more flexibility into their real estate portfolios. The current situation will also see larger enterprises seeking smaller spaces to ensure synergised business continuity in the near future. There’s now a lot more interest in taking dedicated and secure private offices, which is the big shift in the flexible office space industry. As large enterprises look to curb capital expenditure or long-term commitments on office property, co-working spaces will see a surge as they offer flexible infrastructure solutions and also set precedents for safe and healthy practices.

Co-working spaces offer flexibility 

As the professional world returns to normalcy, traditional offices owing to their rigidity will not be equipped to address the new normal. Many companies, even pre-pandemic, have had to deal with the burden of long-term, lock-in leases with heavy security deposits, which take away the ‘business cashflow’ ability to respond to changes in the economy quickly. Now, more than ever, flexibility is crucial. Hence, co-working spaces, with their natural flexibility and inherent readiness to add value, are best positioned to adapt and redefine the future of work and workspace. As companies look to resume business, redesigning and restructuring of existing real estate will pose yet another challenge, however, co-working spaces will be able to respond to design changes required post-COVID-19 quicker and more efficiently than traditional office spaces.

Consolidation on the cards 

We can expect more mergers and acquisitions among operators soon as the smaller ones will find it difficult to survive as it is a capital-intense industry. The market, certainly, cannot accommodate hundreds of operators and large firms will hold sway and garner a larger portion of the market. Smaller players may be absorbed in mergers or will alternatively have to close down operations.

Co-working faster at innovation 

COVID-19 has also accelerated the digitalisation of workspaces. An innovative technology ecosystem provides flexible and on-demand places to support convenience, functionality, and well-being. To avoid the transmission of germs at workspaces, co-working companies have enabled comprehensive contactless technology and robotic technology that has attracted clients. The traditional desk will likely be non-existent in the coming years with wearable technology, artificial intelligence, machine learning and Internet of Things taking over co-working spaces, causing massive disruption and transforming them into autonomous workspaces. Smart access, meeting rooms and receptions have already forayed enabling cloud-based access system, facial recognition and real-time security monitoring.

A complete solution, not just a space provider

The pandemic has evolved brands from just being workspace providers to becoming a fully integrated workspace solution platform for their clients which offers products to the entire spectrum of work requirements including co-working, enterprise solutions and remote working. Co-working players are curating unique experiences and engagements by providing state-of-the-art amenities like gyms, cafés, creches and managing the complete building ecosystem by bringing alliances, events and community focus to the occupants.

The inherent flexibility to adapt and adopt, and its ability to foster a strong community spirit determined to win in these trying times will augur well for the co-working industry. The COVID-19 pandemic and the prolonged lockdown have made both employers and employees realise some great benefits of remote work, which has potentially changed the dynamics of workplace usage forever. As the Indian economy is slowly getting back to a ‘new normal’ following the Covid-19 outbreak, each industry is re-inventing its business model to adapt to a post-COVID -19 era. Sometimes, a crisis also presents an opportunity to make decisions that would be hard to make in more business-as-usual times. Despite the disruption, the focus would remain on managing revenues and increasing productivity and flexible workspaces will play an even more important role in rationalising costs and maintaining financial agility. Co-working space providers are in a unique position to leverage the opportunity and make the segment more attractive for its consumers. Hence flexible workspaces can fit the bill and address the gap with the right blend of safety, sustainability, and cost optimisation for any business to grow and change with the current scenario.

More About Manas Mehrotra

Manas is a qualified member of Institute of Chartered Accountants of India. He has completed Law from Mumbai and possesses an MBA in Entrepreneurship from Babson College (USA). He has earlier worked with Ernst & Young as Global Tax Advisor. Quite early in his life, Manas’ leadership qualities were evident, which found their manifestation in his emergence as an entrepreneur par excellence, with a vision for the betterment of society. He drives his workforce with a strong emphasis on inculcating faith and building long-term strategic relationships with both clients and employees.

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