Mumbai Leads the Charge: Coworking rental rates surge by 27% since FY20

Mumbai has seen the highest growth in coworking rental rates since FY20, with an increase of 27%, followed closely by Gurugram at 19%, according to a report by Anarock, a real estate consultancy firm. As of FY24, the average monthly rental per seat for flexible workspaces in Mumbai stood at INR 15,900, compared to INR 12,500 per seat in FY20. Gurugram witnessed a growth of 19% during the same period, with rental rates increasing from INR 8,500 per seat in FY20 to nearly INR 10,100 per seat in FY24. The top five flexible workspace hubs include Mumbai, Delhi, Gurugram, Noida, and Bengaluru.
The report further reveals that Delhi, Bengaluru, and Noida experienced rental growth of 18%, 15%, and 14%, respectively, in average monthly rental rates per seat. Delhi's flexible workspace rentals rose from INR 10,000 per month per seat in FY20 to approximately INR 11,800 per seat in FY24. Bengaluru witnessed an increase from INR 7,800 per month per seat in FY20 to INR 9,000 per seat in FY24. Similarly, Noida saw a growth of 14% in average monthly rentals for flexible workspaces over the last four years, rising from INR 6,500 per month per seat in FY20 to INR 7,400 per seat in FY24.
Coworking spaces contributed to 18% of the total office supply in the top seven cities' office leasing market in the current financial year. Utkarsh Kawatra, Senior Director at myHQ by ANAROCK, highlighted the expanding Asia-Pacific market for co-working spaces, with Hong Kong, China, India, and Japan witnessing significant growth. Kawatra predicts that the flexible office space market in India will aggressively expand from the current 55 million square feet to between 100 million square feet and 140 million square feet by 2030.
The report also indicates that coworking spaces accounted for nearly 18% of the total new office supply across the top seven cities' office leasing market in CY2023. Despite the challenges posed by the COVID-19 pandemic, funding in the coworking sector remained high, with significant investments made post-COVID-19 compared to the pre-pandemic era. Flex workspaces acquired 20% of the total office supply addition in the last two years, with an average coworking centre of 20,000 square feet yielding an internal rate of return of 40-70%.
With 70% of companies adopting a hybrid work model and two out of three industry professionals predicting that coworking demand will surpass that of traditional office spaces by 2030, the future of coworking appears promising. Additionally, hotels and F&B outlets are capitalising on the coworking trend to maximise revenue from under utilised daytime inventory. With projected growth to 65 million square feet by 2024 and high occupancy rates indicating strong demand, the coworking transformation is set to redefine India's work culture.

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Mumbai Leads the Charge: Coworking rental rates surge by 27% since FY20

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