“The commercial real estate industry is evolving at a fast pace and flexible workspaces are defining this growth. Our industry has helped shape new strategies for landlords and tenants. It has engineered a solution that provides customized, collaborative, and efficient spaces for SME’s as well as large corporate.”- Nidhi Marwah, Managing Director, South Asia and GCC, The Executive Centre
Dynamic workforce and fluid business strategies have lead to the development of the flexible workspace industry. The industry has been evolving ever since its inception and now witnesses innovation with every new venture. In order to understand its evolving business model, we reached out to Nidhi Marwah, Managing Director at The Executive Centre, South Asia and GCC.
Here are some edited excerpts of the interview:
How and when did you get associated with The Executive Centre? How has the flexible workspace industry changed over your tenure?
I joined The Executive Centre in 2008 as a Senior Business Development Manager at its first location in South Asia, Mumbai. That year was not a very good time for the company because the economy was disturbed with the news of introduction of GST and the 26/11 Mumbai attack. Nevertheless, it made me realise why the flexible workspace industry will still be required irrespective of market collapse or a boom. Ever since then we have been expanding to different regions and currently we operate more than 50 locations in South Asia running with an average occupancy of 90%.
What is the need of flexible workspace in the economy?
Productivity, Efficiency, Accessibility and Collaboration are the four things that are constant in any kind of business setup irrespective of it being a flexi office or a conventional office. But with changing business strategy and changing work-style, businesses are incorporating flexible office timing, flexible office location and flexible office setup which lead to the demand in the flexible workspace industry. When the economy is booming, companies are expanding and market consolidation takes place which leads to the demand of plug and play options on an urgent basis. During economic slowdown companies are constantly evolving their business model which leads to the requirement of a temporary setup.
The business model in the flexible workspace industry has been constantly evolving. What are your views regarding the same?
First of all, we are dealing with a blended workspace which includes mix of freelancers, start-ups and corporate professional. Secondly, everybody is seeking the support of technology and community. Both of these factors lead to an ever changing demand of products and services such as silent rooms, meeting rooms, collaboration and hurdle rooms and others. The operators are evolving their product and service mix by including private office, open workstations, conference rooms, phone booths, serviced offices and others in order to cater to the changing demand.
As per our understanding, Information & Technology, Financial Services and Professional Services are the major occupiers of flexible workspaces, whereas labor intensive industries such as construction, hospitality and manufacturing are not using flexible workspaces. How has the occupier profile changed over the years and who are the major end users for The Executive Centre?
We have always had client from the financial sector right from private equity firms to banking sector. After we expanded to the IT corridors of Pune, Gurugram, Hyderabad and Bengaluru, we expanded our client base in the IT sector. Over the years the IT sector has taken up a larger footprint in comparison to the financial sector. Our occupier profile has evolved as companies from different sectors are following the “hub and spoke” model wherein, the corporate head office is acting as a hub and the flexible workspaces are spokes.
Niche co-working spaces with industry specific target audience such as Launchpad a art focused co-working facility in Philippines, Fuigo in New York is exclusively designed for interior designers, FoodCoWorks in India is exclusively designed for food business operators or cloud kitchen operators and others are gaining traction in the industry. What are your views on the concept and future of Niche Co-Working Spaces in Asia Pacific?
It is a great idea to have individuals with similar mindset and similar focus under the same roof giving them the opportunity to collaborate and form a community. In the Indian economy, business are developed by the collaboration of multiple industry and therefore I think in the long run business have to collaborate with individuals at different stages in the business cycle and therefore such kind of places will have to incorporate individuals from different sector. But it would be very interesting to see the evolution of co-working space for food business.
How will the demand of flexible workspace change in the future?
More and more industries are opening up to the idea of flexible workspace. I think the demand will definitely grow. All the operators in the industry should show the onus of delivering the required solutions in order to ensure sustainability of the industry.
Long term leases signed by the operator and short duration occupiers have lead to uncertainty in the industry. The operator-landlord relationship has been evolving to reduce risk. What are your views regarding the same?
The industry has been tuned to the end users requirement. Operators are evolving in order to incorporate to the changes in the requirement. The Landlord-Operator relationship will also keep evolving with the Operator-Client relationship in order to accommodate the changes in the business world. People, Product and Personalised Services are the three P’s that the operator has to specialize on, in order to ensure business sustainability. Co-working operators should develop on their Emotional Quotient to better empathize with the customer and understand pain points from the client’s point of view.
Regus, WeWork, The Executive Centre, JustCo, Servcorp, Ucommune and Awfis are some of the major players in the APAC Flexible Workspace Industry. What has been The Executive Centre’s strategy in order to maintain the competitive edge in the industry?
The Executive Centre has sustained for more than 25 years. We focus on people’s requirement, we are not binding ourselves within the framework and we are trying to evolve with the market. We are not incorporating changes for just a year or a month but we are incorporating the required changes on the long term basis. This I think has helped us to maintain the competitive edge in the industry.
Considering the current scenario of the industry, what do you think should be the top priority of flexible space operators? Should it be revenue growth, market expansion, ensuring profitability or seek more funding?
I think it should a mix of all of them and it should be an inclusive agenda. Nevertheless, I will vote for business profitability as that will ensure sustainability and stability. Members are looking for flexible workspace operators who are sustainable. Profitability will lead to development of member trust and loyalty which ultimately decides your business performance. Operators should also focus on value proposition, technological expansion and profitability enabling them to put the money back into business, in order to enhance customer experience.
What are the upcoming trends in the industry and how do you see the future of the industry?
There is no trend which will stay in the industry forever. Change will remain the constant. With changing technology companies will continue to strategies to empower and encourage their employees, in order to have higher engagement levels for them. The flexible workspace industry will continue to innovate.
For any queries or feedback, reach out to the author at email@example.com
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