Anuj Puri, Chairman – ANAROCK Property Consultants
Gurugram is home to around 1,500 start-ups and is the 4th largest start-up hub in India. As the city hosts the behemoths of the start-up industry, it makes sense to delve a little deeper into this fascinating new office space sector in Millennium City.
Emerging commercial office locations in Gurugram, as also in Bangalore, Navi Mumbai and Hyderabad, have benefited significantly from the Indian start-up euphoria. This trend is likely to continue for some time given the availability of large talent pool and availability of real estate spaces.
The start-up eco-system in India has been a key contributor to the rise in investments and job creation. Many start-ups that commenced operations in later part of the previous decade have already become medium-sized or large companies, particularly if we look at some of the popular e-commerce companies in India today.
From zero contribution to office space take-up, the e-commerce sector today contributes over 3% of the total office space absorption on an annual basis. We expect the growth in this sector to increase over time.
The government initiatives such as Digital India is encouraging start-ups in IT, computing, manufacturing, life sciences and biotech, retail etc. The response is tremendous as India is already a leading start-up destination.
In fact, quite a few start-ups in the real estate space have improved the way the realty sector operates. More usage of technology in construction, architecture, information and brokerage have led to added transparency and efficiency in the system, which is positive for the sector.
Of all the office spaces, co-working spaces – the preferred option for most start-ups – have revolutionized the commercial real estate sector the most. Gurugram – the Millennium City – is witnessing a surge in demand for co-working spaces, primarily due to the extensive industrialization of the region, rising services sector, the presence of big corporate houses and MNCs in the neighbourhood, easy access to the airport, metro connectivity, etc.
In addition, rising real estate costs are pushing many companies towards utilizing co-working spaces.
The vast talent pool, various think tanks and the human-ware in terms of investors are contributing to the growth of these start-ups.
Advice for investors in start-up-specific commercial spaces
Investors must look for the right location and asset class in order to make the most of their investments. While office occupiers from the BFSI and IT sectors look for Grade A properties with large floor-plates, start-ups look for spaces with a mix of new-age design, professional building management, enhanced energy efficiency and floor spaces along with creatively conceived fit-outs meant specifically for their unique requirements.
Large institutional investors tend to seek professional advice in order to select the right developer partners, identify the kinds of office spaces which cater to start-ups and to do proper due diligence.