The Real Value of Co-working Spaces in India
In India, where real estate prices in viable commercial locations in major cities have been skyrocketing, co-working spaces offer a clear alternative for businesses looking to cut costs without compromising productivity.
A recent comparison of rented spaces versus co-working spaces in major cities by the Economic Times found what we know to be true – it is cheaper to opt for a co-working space.
When you do that, you save on both, fixed costs as well as recurring monthly costs. Fixed costs include refundable deposits, furniture, installation of electrical gadgets and appliances, whereas monthly costs could include the rent, office supplies, conference rooms, electricity, and internet charges. While you still have to account for salary payments, a co-working space offers proprietors considerable breathing space while financing their companies.
The real benefit of co-working spaces lies in savings on fixed costs
While savings on monthly expenses can range from as little as 2% to as high as 44% based on your city, the real savings you’ll see will come from fixed expenses.
You can save up to 75% of your fixed costs if you decide to shift to a co-working space, or if you design your business model around it. This may vary based on the city you choose to set up base in. Based on how much you can save, here’s an assessment of seven metro cities in India.
Save between 70-80% of your fixed costs
Mumbai: The fixed cost of co-working spaces in Mumbai is only about 25% or one-fourth of the fixed cost for a leased office space. This cost difference is so dramatic that a rented office in Lower Parel, Mumbai would cost Rs.3, 41,000 while a co-working space would cost you only Rs.90, 000. On top of that, expect savings of 11-16% on your monthly costs in Mumbai.
Chennai: The rates for co-working in Chennai are similar to those in Mumbai. The fixed cost of an office space is one fourth of a rented space. So, if you pay Rs.2, 22,000 for a rented space, you can save three-fourths of that cost by paying Rs.58, 500 for a co-working space, instead. In Chennai, you can save 10-15% of your monthly cost.
Pune: Expect similar savings of up to three-quarters of your fixed costs, if you were to rent your own office. An independent rented space in Pune’s BMCC would cost you Rs.2, 10,000 while in comparison, you can rent a co-working space for just Rs.45, 000. Pune offers slightly higher savings in terms of monthly expenses, at about 25%.
Kolkata: Kolkata’s monthly costs for co-working spaces are much lower, almost half, while the fixed costs are about 25% lower.
Save between 55-65% of your fixed costs
Bangalore: In Bangalore, instead of an office that would cost you Rs.2, 60,000 a month in Ashok Nagar, you get a co-working space at only 41% of this price. Savings on monthly expenses though, are just about average — you can save nearly 5% per month.
Delhi NCR: The national capital region of Delhi offers impressive savings of between 57% and 63%, depending on where you are. For example, in Netaji Subhash Nagar, a rented office costs Rs.1, 60,000, while a co-working space would be available for Rs.58, 500. It’s one of the best places to save big on monthly costs too — expect savings of about 25% in this category.
Save between 35-50% of your fixed costs
Hyderabad: Hyderabad may be the lowest on this particular list, but businesses based here can breathe free. A co-working space more than halves your expenditure on office space – in Gachibowli, a rented office space is Rs.1, 80,000 a month while a co-working space in the same area would go for half the price – Rs.90, 000.
When you opt for a co-working space, there are many hidden benefits. You save on land and building depreciation costs. You can pay for meeting rooms and conference rooms only as per your use. Moreover, co-working spaces take care of management, cleanliness, the pantry or coffee shop and also offer a range of services and common spaces for your benefit. What’s more, your team is likely to be happier with the flexibility and variety a co-working space offers.
There are so many benefits of co-working spaces in addition to considerable cost-cutting, that there’s really little competition with rented offices. They offer the perfect environment for you and your team to focus on work without distractions, think out-of-the-box and be productive. If you are a progressive, young organisation with a focus on innovation, co-working could be the solution you’ve always wanted.
Note: All the above figures have been calculated from the Economic Times survey available here.