IWG country head speaks about co-working spaces

By Praveen Kumar S Published on Jul 27, 2018 03:22 PM IST

Chennai: Co-working spaces is the buzz word in the present business world. The industry has beengrowing at a tremendous rate, about 3050 per cent from 2010.

People working in the co-working spaces have grown around 8,000 per cent as well.

Recent reports stated that co-working spaces will triple in the next three years, making it the fastest accelerating market in the entire world. In that respect, News Today had an exclusive interaction with country manager, IWG plc, Harsh Lambah to know where the industry is heading at since it was literally created by IWG in the name of a business centre.

Origins

"We are IWG - International Workplace group. We were found in 1989. In the early days, it was used to be called as the business centre. From there, it evolved into, what would be called as serviced offices and now everybody is calling this industry as the co-working industries," said Lambah about IWG and the origins of the industry.

Last year, the co-working industry was the fastest growing industry in the world and we are very proud that we pioneered this. We are the national as well as the global leader. We are present in 110 countries, we have got 3,330 workspaces all across the globe in around 900 cities," he said.

Speaking about India, Lambah said IWG has 110 workplaces in about 16 cities across the country. 'We are the only global player who are in tier-II cities as well. In south, we are in Coimbatore and in Visakhapatnam and in the north, we are in Chandigarh, Lucknow and Jaipur,' said Harsh Lambah.

Spaces vs Regus

IWG has two brands in India namely Spaces and Regus. Lambah said both concepts could not differ.

"Regus is our older brand, while Spaces is our newer one. We acquired spaces about three and a half years from Amsterdam. It is a very inspiring workspace, it is new. It is something that should attract the millenial worker, the new worker," he said.

At Spaces, customers are provided with amenities to take care of their core competencies, said the India head, adding "We provide everything they need in their offices."

Adding a word about Chennai, he said, "We have been very successful. There are six Spaces in India right now and we are hoping to have 12 of them by the end of the year."

"We are bullish about the market, we are the global leader and we could really drive the market. In Chennai, we have 11 workspaces now that we should be doubling within the next 36 months," he said.

Asked why Regus is needed for it is much smaler in terms of outlet space when compared to Spaces, Lambah said, "Different companies look for different experiences. Spaces is a vibrant brand catering to the youth, while Regus is more professional service office brand and our criteria is to cater to all the major metros. Any company or start-up or organisation will have the option to choose from either Regus or Spaces."

"We are looking at the co-working industry (closely). It is a trend and it will see changes happening. We need to try to stay ahead of the curve and cater to what all our customers are looking for. We are very focussed on growing the Spaces network followed by Regus on selective micro-markets," he said.

Lambah was keen to exhibit the differences between Regus and Spaces. He said, "Charges are different as per the location, the market that we are present in. Our costs are based on market trends. Within the workspace itself you will see that external offices are expernsive than internal ones. Also, pricing depends on term. If you look at three years, the pricing is better rather than for 12 months. I think we have the right product in-terms of the workspace that we are building and we have the right value proposition and very good occupancy."

He said occupancy right now is in the high 80's in terms of percentage. "For us seasonality comes with either the financial year or budget time," he said.

Harsha Lambah said the co-working spaces industry does not depend on the economic stability of the market. According to him, "In this industry, when economy is doing well, we get natural demand. When the economy is not doing well, companies come to us as we offer convenience and flexibility that you cannot get if you go for a lease. In certain countries when the economy is not doing well, our business does well because we support customers who come to us by being flexible and agile."

Asked if he thinks that Spaces is more in-tune with India, Lambah said Regus works better in tier-II and tier-III markets.

"When we talk about the tier-II and tier-III markets, our focus will still be with Regus for the next 12-18 months. Because for Spaces, the area (in sp ft) is large. If you put a one lakh sq ft area in a small city, it might not be the right decision right now. We are going with Regus right now which has a smaller footprint, 10,000-20,000 sp ft, and we are building the proof of concept out there are we are seeing demand. In many cities, we are building our current centre or second workspace right now. In fact in Lucknow we are building out second workspace and in Chandigarh, we are building a second one. We are expanding in Jaipur, Visakhapatnam. We have a very good response from tier-II. But our offering there will be Regus," he said.

Interest from large firms

Speaking about large companies coming to take up worspaces provided by the brand, he said, "That mindset, India being traditional, is changing. What is interesting is that large companies also want to be part of co-working. Because they want to be faster to adopt to the market. They are coming into the co-working environment and see the environment."

"We are the natural platform for young entrepreneurs to come in as we have a ready-made platform. Everything is taken care of, right from security to reception. Both these key forces will determine where the co-working space will head," he said.

IWG despite being a leader in the industry does work a lot in terms of looking out for new customers said Lambah.

"We do a lot of investment in digital marketing. We have an inside sales team in Kuala Lumpur. Customers can easily reach out and our staff will call the customer and determine what the demand is and then our team would set-up a tour for the customers, show them the workspace and speak about the proposition."

India focus
Talking about expanding their footprint in the country, Harsh Lambah, said, "We are very focussed and IWG being the global leader, we want to double our network in the next 36-48 months in India. We are to make the number of outlets 200-plus soon. We are looking at markets like Cochin. In Chennai, we have about 30-40 staff. We have 10-plus centres here. We are looking at more options, we are looking at other micro-markets within Chennai also."

(The second and last part of this story will be published tomorrow)