News Services

flexible workspace providers: Flexible workspace providers expanding revenue base beyond rentals


Flexible workspace providers are expanding their revenue base beyond rentals to include services such as furniture sales, transportation, IT services, and support for retailing daily essentials.

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.


Source link