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Companies like Smartworks, Awfis, IndiQube, Urban Vault and EFC I Ltd. currently derive 5% to 25% of their revenue from non-rental sources, with plans to increase this.
“We have established a comprehensive ecosystem within our spaces to enhance convenience for our members, offering amenities such as on-site gyms, sports areas, laundry services, recreational zones, convenience stores, amphitheatres and more,” said Harsh Binani, cofounder of Smartworks.
Currently, only 5–8% of Smartworks’ revenue is non-rental, and it continues to grow. Some of the services that generate revenue for Smartworks include F&B, grocery, creche, laundry, meeting rooms and transportation.
IndiQube’s co-founder Rishi Das said, “During FY22–23, the rental income received from the companies accounted for 80% of the total collections. The remaining 20% constituted non-rental revenue that included electricity, maintenance, and other allied services.”
Typically, flexible office space operators generate incidental revenues through booking of meeting rooms, canteen charges, and fees for client-specific services.“In our case, there is an additional source of revenue that is quite significant, which is revenue from interior fit-out,” said EFC founder and CEO Umeash Sahhaaii. “EFC I Ltd. has developed the skill set over a period of a decade to fit out commercial spaces, not just in the office space sector but also in the sectors of hospitality, healthcare, R&D and education.”Under the fit-out division, EFC I Ltd. not only does the interior and furniture but also works on contracts for others to fit out office spaces and other types of facilities.
Revenue from rental is about 77% for the company, while the rest comes from other services. The company wants to take non-rental revenue to 40% in the near future.
“Non-rental revenue is expected to account for 4% of the total revenue in FY 23–24,” said Amal Mishra, cofounder of Urban Vault, a Bengaluru-based managed co-working space provider that also provides fit-out as a service. “We plan to elevate this percentage to double digits in the next fiscal year.”
India’s top flexible workspace providers are expected to post 30–60% growth in revenue this financial year.
Pre-Covid, there were around 400 operators across 1,500 locations in about 55 cities in India. This has increased to around 965 operators spanning 2,320 locations in about 90 cities, indicating a noticeable increase in the utilisation of commercial real estate spaces.
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