- To open the first office in Sept 2022 and the second in Oct 2022 around Diwali
- TOP will become the only Coworking operator to have 14 Coworking offices in Delhi NCR
Gurugram, 31st August 2022: Neighborhood Coworking operator The Office Pass (TOP), which currently runs 12 Coworking offices in Delhi NCR, plans to open 2 new offices in the city before Diwali. This expansion is a result of strong demand for flexible workspace post covid. Companies and employees want to work in an office space close to their residence / business and that is creating a tailwind for Neighborhood small office format. This expansion will strengthen TOPs dominant position further and will make it the largest Coworking operator in Delhi NCR with 14 offices.
The first office will be launched in September 2022 at Sector 3, Noida (walking distance from Sector 16 metro station). This will be followed by the second office at Unitech Cyber Park, Sec 39, Gurgaon (near HUDA City Centre metro station). The latter will be launched in October 2022 around the festival of Diwali. They will have a combined capacity of over 650 seats.
“As companies move away from traditional leases and people prefer to work from an office close to their place of residence, we are experiencing good demand for our Neighborhood Coworking model. This has encouraged us to scale faster. If there are no covid related disruptions & business sentiment remains unaffected by the impending global slowdown, we hope to open one new Coworking office every 45 – 60 days,” said Mr Aditya Verma, Founder & CEO, The Office Pass (TOP).
Last year has been extremely healthy for the Coworking industry. TOP’s revenue in FY’22 grew by 135% and the business turned EBDITA positive (in spite of many Covid related disruptions). The company expects an even stronger growth in FY’23.
Commenting on the company’s expansion Brijesh Damodaran, Partner, Auxano Capital one of the early investors in The Office Pass (TOP) said, “TOP is the first player in the Neighbourhood Coworking space and today it’s a market leader in this space. Managing the working capital efficiently along with being diligent in identifying new office spaces has been its USP. Increasing its geographical reach outside of NCR is the next big step for TOP and 2022 should see this in action.”
TOP’s 12 existing offices (10 in Gurgaon and one each in Noida and South Delhi) are running at over 90% occupancy. The company hopes to achieve break-even in the new offices within 3-4 months of their respective launch.
“The current growth in the Coworking business is driven by four key factors. Firstly, new companies are opting for flexible workspaces over traditional leases. Secondly, there is headcount expansion among existing customers. Next, Coworking operators like TOP are able to pass on an economic benefit to corporates that helps them lower their office operational expenses by 18-22%. Finally, less competitive intensity in the Coworking segment post covid. Many of these factors will continue to be in play over the next 12-18 months,” added Aditya.
The Indian flex space market has seen huge growth over the last few years. It is still very early days for Coworking players. It is pertinent to note is that the current flex market penetration in total office stock stands at approximately 3.5%. According to JLL’s office market report, India’s average penetration rate for the top seven cities could reach around the 4.0-4.5% mark over the next two years.
The demand for flexible workspace was largely driven by freelancers and start-ups in 2015-2019. However, post COVID, organisations of all sizes have developed a fancy for this format. Going forward the demand will be largely driven by small to mid-sized companies and large companies and MNCs using Coworking for their distributed / hybrid office formats.