THE

COWRKER NOVEMBER 2019

COVER STORY

HUDSON YARDS
Is the hype real?

Knotel Sidewalk Labs WeWork's Spaceport The Big Picture

A challenger rises Google builds cities Game Changing Tech? Real estate trends

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Disclaimer: This issue is currently intended for
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or developed for external audiences. Sharing externally
on public platforms may be permitted and encouraged
in the future, but until such an announcement is made,
we advise restricting readership to within CoWrks.
IN THIS ISSUE

01
Knotel
A Challenger Rises
19
SpacePort
WeWork’s biggest
step towards
accelerated sales

10
23
The Rise
of Hudson

05
Yards
What we can learn
from the biggest
private real estate The Big
project in US Picture
Sidewalk history Flexible office spaces
Labs trends across the key
Smart Cities micro-markets of NCR,
Mumbai and Chennai
Competition
Knotel
A Challenger Rises
Manavv Rajpall

Knotel-created office spaces

M
uch of the credit that
WeWork gets for disrupting
an entire industry is well
deserved. They have redefined how
one thinks of an office space, and
established new benchmarks in
design, construction, operations
and customer experience. In the
wake of their success, dozens of
competitors have followed and
tried to emulate or improve upon
the WeWork model. While WeWork
continued to dominate the market,
streets and public discourse, one of
these competitors has quietly been
rising minus the fanfare to take on
WeWork at it’s own game: Knotel.
What’s different?
Knotel is the antithesis of WeWork.
While the latter is ubiquitous,
Knotel has been intent on
remaining virtually anonymous.
Like WeWork, Knotel’s pitch is also
centered on offering shorter terms,
flexibility of scale, designing and
outfitting a space, and managing
day-to-day operations. But instead
of focusing on freelancers and tiny
start-ups, Knotel chooses to court
larger companies with some very
distinct needs.
“
“We serve large companies.
They’re not moving every day
or every week,”
Amol Sarva
Founder, Knotel.

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 WeWork Vs Knotel
Similarities:
• Customized commercial real
estate tailored to a business’s
particular brand or needs
• Ready-to-move-in office spaces
• Locations in 100+ cities around
the globe
Knotel operates on the fundamental
belief that people prefer to work
among their own. They seek a
degree of quiet and some sense of
professionalism when visitors come
calling. This is especially true for
larger corporations which represent
a vast majority of their customers.
They also want their office to reflect
their own culture - not the space
provider’s culture. They need
greater customization, and they do
not like sharing their office with
other companies. Where WeWork
saw a challenge in lowering the cost
of dedicated workspaces (instead,
choosing to focus on selling the
idea of shared spaces), Knotel saw
WeWork’s brand revolved around a ‘cultural revolution’.
Knotel is focused on how companies shop for offices,
rather than the office itself.
Differences:
• WeWork particularly
appeals to freelancers and
entrepreneurs. Knotel targets
larger businesses.
• WeWork’s customers outsource
culture. Knotel’s customers
prefer their own culture.
• WeWork has more square
footage to rent overall, though
Knotel is working fast to
catch up.
opportunity. The real kicker is that it
turns around a customised space in
a matter of weeks instead of months -
and at a fraction of the $200-$300
per square foot that companies
typically spend to refit new offices.
Typical time taken to fit out and
deliver a customized space
8 to 12 months Traditional Offices
4 to 6 months Most Flexible Workspaces
3 to 6 weeks Knotel
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 This reduction in delivery time is incredible. How do they manage to do it?
Our research indicated a slew of innovations and processes that span across
their real estate, design and development workflows:

Property Acquisition Design & Development

• Acquire properties faster and
at better terms than their
competitors through ‘Baya’ - their
proprietary blockchain facilitates
acquisition decisions, and makes
transactions digital, semi-
automated and transparent
• TAT of 24 hours to send a broker
or a property owner a term
sheet expressing interest in the
property
• Lease space only to companies
with an seat requirement
of 11 – 250.
• Gain agility through modularity:
◦ Grid based layout
◦ 100% modular furniture
◦ False flooring
◦ Standardization of material &
design
◦ Open floor plan
• Functional > Aesthetic design
• Dedicated Project Management
• Understand work styles and
culture of the client
◦ Shadow the client to
understand needs/behaviours
◦ Look across different
departments, tenures and
experience
• Reflect the company’s brand and
culture in the space, and not be
tagged with someone else’s brand
• Build a deep understanding of
productivity in various contexts.

Knotel-created office spaces

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The strategy seems to be working.
They have established a footprint of
4 million sqft across more than 200
locations, which house clients such
as Starbucks Corp., Microsoft Corp.,
Oracle Corp., AT&T Inc. and BP.
Around the same time that WeWork
was coping with its IPO debacle,
Knotel successfully raised $400
million in funding from a diverse
group of investors. It is believed the
company is now valued at at least
$1.3 billion.
Sarva predicts that they will leave
their biggest rival behind. “Our
business is so different. In 18 to 24
months they’ll be behind us. It’ll
be like EBay and Amazon, Myspace
and Facebook.”
We believe it’s futile to try and
predict which company will
ultimately come out on top, but what
is clear is that the flexible office
space is here to stay. Customers have
evolved well beyond the universal,
traditional office space model and
will continue to increase in size
and become distinct segments
with distinct needs. Meanwhile
workspace providers will attempt to
stake claim to these segments. For
now, both WeWork and Knotel seem
well positioned to address two of
these customer groups.
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Smart Cities
Google Sidewalk Labs
Krrish Kothari

T
he movement toward smart the ground-up, 21st century style
cities has progressed slowly in - saturating various touchpoints
recent years. The complexities of city life with IoT devices and
in building a completely new form use the collected data to make city
of digital infrastructure is certainly life more data-driven, intelligent
a factor, but the public fears and and responsive.
political tensions surrounding
turning a city into a data extraction
system is perhaps even more so. It’s
one thing for data on public utilities Sidewalk Labs identifies
and traffic to be collected and five key components of
accessed by government officials,
but another for a private corporation building the new district:
to take the lead in developing a economic development,
neighborhood to suit its vision of
the future.
sustainability, housing
affordability, mobility, and
Sidewalk Labs is an Alphabet
company (parent of Google) with an
urban innovation, which is
ambitious vision to create hi-tech, vague but seems to mean
smart cities. Their first project,
using data to improve
a waterfront district of Toronto,
aims to transform the district from city services.

The Toronto quayside neighbourhood

set for redevelopment by Sidewalk Labs

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Sidewalk Labs identifies five key
components of building the new
district: economic development,
sustainability, housing affordability,
mobility, and urban innovation,
which is vague but seems to mean
using data to improve city services.
Sidewalk labs has committed to
a $900 million equity investment
that will contribute to the $3.9
billion budget for the first phase
of the project, and has proposed
another $400 million to accelerate
the development of a light rail
transit system to the neighborhood.
The company will also provide $10
million in initial seed funding for
an Urban Innovation Institute, and
serve as lead developer, technical
partner, and advisor.
Their pitch is that bringing 93,000
new jobs to a rebuilt neighborhood
with affordable housing will allow
for a diverse community that is well-
positioned to thrive as a destination
for innovation. Scooters, self-driving
cars, modular pavement, multi‑use
public and business spaces,
sustainable building materials,
next-generation power systems, and
more mark the far-reaching effort
to put Alphabet in control of nearly
every aspect of a neighborhood.
Sidewalk Labs has proposed
a Master Innovation and
Development Plan that includes
elements of user-centric design
and seeks to promote the health
and well-being of residents. For
example, Quayside’s streets will
prioritize transit, cycling, and
walking instead of a car-centered
design and the city will have a
thermal grid for fossil-free heating
and cooling. The plan articulates
inclusiveness for indigenous
populations, individuals with
disabilities, and other members
of the community as a goal of
the design. The company is
also promising “an ambitious
below-market housing program”
that would include 20 percent
affordable housing and 20 percent
middle-income housing units.
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The Quayside of Tomorrow
Buildings
• Quayside would be the first
neighbourhood built entirely of
“mass timber” — a material every
bit as strong and fire-resistant
as concrete or steel but far more
sustainable.
• A system of flexible wall panels
would enable renovations to
Loft and residential spaces to
occur much faster than normal,
reducing vacancies and helping
the neighbourhood adapt to
market conditions.
Housing
• Middle-income housing
options would include “shared
equity” units designed to help
households build value in their
home without the high up-front
cost of a traditional mortgage
down payment.
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Sustainability
• An advanced power grid would
use solar energy, battery storage,
and time-based energy pricing
to reduce reliance on the main
Toronto Hydro grid during periods
of peak demand and make an all-
electric community affordable.
• An active stormwater
system would rely on green
infrastructure to capture and
retain stormwater and on
digital sensors to empty storage
containers in advance of a storm.
Digital Innovation
• A publicly transparent
Responsible Data Use Assessment
would ensure that companies or
community members wishing
to use urban data do so in a way
that has a beneficial purpose and
protects privacy.
 Detractors fear that at the core of
the Sidewalk Labs project is the
goal of tracking people without
their consent. While the data will
be protected as a “public asset,”
Alphabet will still have access to
all this data because its systems,
they say, will be collecting it. In
response, the company has called
for the creation of a non-profit entity
- Urban Data Trust, to collect the
information that is collected, but
Sidewalk Labs’ systems will likely
be interlocked with almost every
aspect of not just infrastructure but
city life.
“ As in New York, where fierce
“While there would not be proposed
prohibitions placed on data collectors
who would like to sell data containing
personal information or to use such
data for advertising, a higher level of
scrutiny should be placed on projects
that want to use personal information
for these purposes… Sidewalk Labs
has already committed publicly that it
would not sell personal information to
third parties or use it for advertising
purposes. It also commits to not share
personal information with third parties,
including other Alphabet companies,
without explicit consent.”
Sidewalk Labs Toronto
sidewalktoronto.ca/documents
This reassurance by the company
is welcome, but unfortunately
some of their peer tech giants have
8
demonstrated a willingness to bend
the rules they themselves set, for
profit. Unsavory actors on digital
platforms, as well, have taken
advantage of loopholes and glitches
as well. Thanks to the Cambridge
Analytica scandal, congressional
antitrust hearings, the theft of
data from a range of major private
companies including Capital One,
Equifax and T-Mobile, foreign
disinformation campaigns, election
meddling, and the popular Netflix
documentary The Great Hack, public
trust in the technology industry
has deteriorated significantly in a
relatively short period of time.
opposition to Amazon led the online
retail giant to cancel plans to build
a second headquarters in Long
Island City, a local movement here
is growing to send Sidewalk Labs
packing. The concerns: money,
privacy and whether Toronto is
handing too much power over
civic life to a for-profit American
technology giant.
To be fair, destinations around
the world have taken advantage
of the branding opportunities
that come from building new
innovation districts. Attracting
new businesses and investment
also boosts a city’s travel industry,
bringing business travelers and
meeting attendees in droves. The
improved areas, obviously, attract
leisure travelers as well. Open data
has been a cornerstone of the smart
city vision for years. It hasn’t been
a linear route from investment
to innovation, as the evolution of
digital innovation in London and
Melbourne have shown.
 As the influence of companies like
Alphabet grow in the urban space,
though, caution should be taken as
surveillance capitalism moves into
the physical world.
Even if many questions remain
unresolved about Sidewalk Labs’
plans for Toronto, the fact they’re
getting asked is important in itself.
Smart city technologies are only
getting more sophisticated, and
most governments (not to mention
The identified site (marked in red) for redevelopment
citizens), have not thought through
potential implications. A world
where technology is embedded
in municipal infrastructure is
not far off, and in some ways it’s
already here. How we manage
these capabilities to minimize the
risks and maximize the rewards is
something that increased debate,
and experimentation will address.
Whether the project moves forward
in Toronto, elsewhere, or not at all,
the world should pay close attention.
9
The Rise of I
f you were in New York City before
2016, you’d be unlikely to find

Hudson Yards
Cover Story
What we can learn from the
biggest private real estate
project in US history
Sandeep Sharma
yourself in Hudson Yards. This
western edge of midtown Manhattan
has been less a neighbourhood, more
a service entrance with it’s collection
of gritty parking lots, a giant rail-yard,
an NYPD tow-pound and helipads.
One of the last vestiges of early-1900’s
Manhattan at odds with its 21st
century image of capitalist glory -
Hudson Yards remained undeveloped
for decades. A final frontier for NYC
real estate. Average New Yorkers in
turn, had little use for it, reserving
their time and affection for the
rest of their city’s otherwise loved
neighborhoods.

10
Hudson Railyard (outlined in yellow) before the development
Much of that changed in 2005, when
then mayor Michael Bloomberg’s
administration pushed through a
rezoning proposal that opened up
the yard for mixed-use development
by private developers. Bids were
made to re-imagine the space, with
real estate firms Related Companies
and Oxford Properties winning
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the contract. Fast forward to 2019
- when the $25 billion project was
opened - an unreal transformation
of the industrial wasteland to a
slick, ultra-urban neighbourhood of
6 glass skyscrapers, an arts center,
a shopping mall, a public park and
an interactive public-art showpiece,
was unveiled to the public.
Imagine building a 28,000
Migratory
birds
plants
concrete roof on top of
an existing overground
railway network Long Island
200+
trees
Rail Road
equalling the area of 8 train storage
yards
football fields, and then
Plenum
building on top of it Drainage
space

13 skyscrapers, a four- Stormwater

storage tank
storey shopping mall,
Sand based
school, parkland, arts structuralsoils

center with a sliding roof

DEEP SUPPORT
and an interactive public FROM BELOW

artwork... while keeping

the railyard functional. Bedrock
Amtrak/New Jersey
Cassion Transit HudsonTunnel

From developers’ perspective, the Hudson Yards press release

Hudson Yards project is a marvel. An
as opposed to a regular drill pattern
achievement unprecedented in scale,
in a common building scenario.
ingenuity, complexity and cost. First,
Even with the foundation aside, the
imagine building a concrete roof
project is a representation of the
on top of an existing overground
latest in construction, materials,
railway network equalling the area
and function.
of 8 football fields, and then building
on top of it 13 skyscrapers (the tallest
This was achieved by drilling pile-
being 1270ft high - roughly equal
foundations (steel/concrete pillars
to the Empire State Building), a
that hold up a building) on irregular
four-storey shopping mall, school,
areas in-between the winding rail
parkland, arts center with a sliding
tracks - as opposed to a regular
roof and an interactive public
drill pattern in a common building
artwork... while keeping the railyard
scenario. Even with the foundation
functional. This was achieved by
aside, the project is a representation
drilling pile-foundations (steel/
of the latest in construction,
concrete pillars that hold up a
materials, and function.
building) on irregular areas in-
between the winding rail tracks -

12
Before
Hudson Yards in 2012

After
Hudson Yards in 2019

13
Second, is the approach to
architectural design. A super-
group of celebrated architects was
assembled to design components of
the mega project: KPF, Skidmore,
Owings & Merrill, Foster+Partners,
Roche Dinkeloo, Elkus Manfredi
Architects, Frank Gehry, Santiago
Calatrava and Robert A.M. Stern.
Praise and criticism
Matching the project’s scale is the
intensity of debate that the project
has generated. Many have hailed
the project. For instance, Mitchell
Moss, an urban planning professor
at NYU says, “This is one of the
great transformations of New York
City. They took an area of the city
that had been run down, that had
been a place people avoided, and
they turned it into a live, active part
of the city that generates revenue
and jobs.”
Detractors on the other hand speak
of it as an expensive retail space
aimed at the 0.1%, masquerading as
a public neighbourhood. Criticism
has poured in from many quarters:
designers, architects and the public.
“Open for all, but not for all”. “The
kind of celebration of gaudy
materialism that would make a
Las Vegas developer proud”.
What probably is at work
though, are two subtle forces:
the convergence of global culture
towards homogeneity, and a
reluctance to embrace radical
change. An increasingly connected
world has led to the rise of a
The towers of Hudson Yard Phase-1 and their architects
global ‘sameness’, with the first
signs appearing in commercial
experiences. Visit a shopping mall or
airport in any cosmopolitan city, and
you will be struck at how similar the
sights, sounds & smells are.
A similar trend is seen in
architecture. Glass & steel towers
are replacing super-tall concrete
buildings for good architectural
reasons. It is understandable that
the loss in heterogeneity and visual
representation of cultural identity, is
unsettling to some. Secondly, this is
not the first time that a new part of a
city has received resistance from its
citizens. Rockefeller Center and the
World Trade Center twin towers had
many bemoaning the appearance of
unimaginative concrete boxes. More
famously, many Parisians hated the
idea of a giant steel tower which they
considered out of context. With time,
outrage gave way to acceptance, and
all of these examples became integral
to and emblematic of what the city
stands for.
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Learnings from

6.7M
the project
Regardless of where one stands on
the debate, this project offers some sqft of commercial space
significant learnings:

0.75M
1 Mixed-use
development
sqft of retail space

Cities around the world are

increasingly seeing a resurgence
of mixed-use projects that blend
4962
residential apartments
commercial, residential and

34
retail space all within the same
environment. This is not entirely
new to humanity. Most pre-
industrial cities evolved as vibrant Restaurants
clusters that kept work, life and

01
play within walkable distance, but
industrialization and the automobile
revolution made it both necessary
Events space and school
and possible to build large, noisy

factories away from residential
areas. Thus was born the commute.
But that was a century ago. Work,
workplaces and communication
have since evolved in a way that
now make the convergence of
life and work possible again,
even desirable. Commuting is in
principle, a productivity sink -
time wasted doing nothing - and
eliminating it represents an
opportunity for productivity gain.
Both employers and employees are
beginning to realize this.
Once phase 2 is completed, the
Hudson Yards project will have
brought together 6.7M sqft of
commercial space, 0.75M sqft
of retail space, 4962 residential
apartments, 34 restaurants, an
15.1
acres of open space
arts venue, a school and 15.1 acres
of open space. It does not get more
mixed-use than this.
If Hudson Yards was an experiment
in mixed-use development, it has
been a successful one so far (at least
for the developers). The pitch seems
to be working - tenants (many of
them tech companies), have lapped
up office space with the belief that
the promise of being able to work,
live, play, dine and shop all at the
same place will help them attract &
retain talent.

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Layout of residential, office, retail and other spaces across the Hudson Yards Development

This has rocketed rental prices in While it may be presumptuous

the entire midtown-west part of to attribute this jump in rentals
Manhattan (where Hudson Yards solely to the mixed-use nature of
is located), way past the other two the project, this was the primary
key commercial neighbourhoods of pitch made by Hudson. In which
midtown-east and the downtown case, the fundamental case for
financial district: mixed-use development is strong
- it can bring value to developers,
Average Rentals ($/sqft) and also serve as a model for
$140 progressive development. The
$120 more efficient use of space and
$100
time, while providing a higher
$80
quality of lifestyle to those who
live and work there is compelling
$60
to every stakeholder. Nowhere
$40
is this as needed as much as
$20
in Indian cities, and I suspect
$0 that municipalities, developers,
2015 2016 2017 2018 2019
tenants and workers alike, will
Downtown Midtown East Midtown West increasingly see opportunity
Average rental rates ( $/sqft ) across the three key to adapt this model to the
Manhattan micromarkets
Indian context.

“It’s always the way: the early bird special. People start flocking, and you try to
catch-up. As soon as the product starts coming up out of the ground and tenants
can start walking it and start visualizing it, that’s when the momentum really

“
kicks in. With Hudson Yards, as time went by, we got our own momentum going.
The last few deals over here at 55 Hudson Yards have been north of $130/sqft.
We had started at $70”.
Jay Cross
President of Related Hudson Yards

16
2
Walkability According to MTA spokesman
Shams Tarek, “The new subway
and connectivity
station was built with the Hudson
at the core Yards commercial and residential
development in mind. It has plenty
The very first development that
of capacity for what’s expected to
marked the start of HY project
come, not to mention the fact that
was not the concrete base, but the
there are about a dozen bus lines,
extension of the 7 subway train by
ferries along the Hudson River
the MTA. Both the City Council and
West Side Highway, the Lincoln
developers recognized that such
Tunnel that will serve the area.
an ultra-dense development could
[Additionally] many people working
result in severe traffic bottlenecks
here are expected to walk”.
and prioritized the extension of
the subway over the site itself. In
With Indian cities’ transit
addition, the 5 surrounding streets
infrastructure expanding over the
and a very creative integration of the
next decade, aligning large scale
high line further ease & encourage
development with transportation
foot traffic, with multiple entry
and walkability solutions from the
points that ensure no gridlock
very start, would be well served.
occurs even at rush-hour.

Entrance to the Hudson

Yards Subway station

The High Line

17
3 Privately led which caters to every price point
and need. On one hand there are the
place-making mall staples - Sephora, Muji, Uniqlo,
Brooks Brothers, H&M & Zara - and
Look beyond the gigantism, and you
on the other are marquee brands
realize that Hudson Yards is a great
that are a first ever for NYC: Neiman
example of private place-making.
Marcus, Cremieux, 3den, Dunhill,
The developers’ vision was very
Rhone and Mack Weldon, Snarkpark.
clear from the beginning - they
This is a smart move as it becomes
wanted to create a new cultural
a shopping and instagram magnet
epicenter that reflects the city’s
from day-1, bringing footfalls and
famed diversity. This influenced
validation to potential tenants.
the decision to work with multiple
architects who each imagined their
The strategy seems to be working.
building uniquely that deliberately
According to Kenneth Himmel,
avoids the feeling of being in
CEO of Related Urban (the mixed-
a ‘campus’.
use arm of Related Companies),
“Initial traffic flow indicates that
Second, the mix of experiences at
20-24 million people will visit on
HY allow it to be presented as a
an annual basis. Over the next 2-3
complete neighbourhood. Arguably,
years, tens-of-thousands of workers
for a public place to be truly
will move into the neighborhood.
embedded in the local community
For many of these individuals, The
requires the joint perspective of the
Shops at Hudson Yards is already
public and developers (something
becoming a daily destination for
this project was not), but it is
their morning coffee, business
important to consider the speed
lunches and grocery trips on the
with which this highly flexible
way home. Based on initial surveys
and mixed-use place went from
of our retailers, approximately 70%
conception to completion, leaving
are reporting strong repeat business,
the public to subsequently imagine
which speaks to the engagement of
uses for it in their own unique ways.
New Yorkers.
This are few precedents to this, and
how the space evolves will be of
keen interest to a lot of city planners
across the globe.
All things considered, Hudson Yards is a

4
bold, important experiment for New York
Retail
City, and other cities and developers should
Strategy
keenly follow its progress in the hope of
At a time when storefront vacancies emulating any future success. At the very
in NYC are at a decade long high
amid an overall slowdown in brick
least, it is an attempt to improve efficiency
and mortar retail, HY has attempted of land use. Time will tell whether Hudson
a unique approach to differentiating Yards really lives up to its lofty promise and
its retail space called ‘The Shops &
Restaurants at Hudson Yards’. At the
hype of being an exemplar in urban design.
heart of this strategy is an extremely But if the past is anything to go by, the
diverse and unique mix of stores, project is already a success in many ways.

18
Technology
SpacePort
WeWork’s biggest step
towards accelerated sales
Akshay Rao
T
ake a quick glance up from
your screen and look around
you— if you’re in one of our 16
CoWrks centres, you already know
that there’s no way you could’ve
expected an office space of the
quality and high-level design that
you see around you from a more
standard office space.
At the same time, this happens to
be the bane of sales representatives
across India who work for
co‑working players, big or small.
A customer who sees an office
space intelligently designed for
productivity and comfort is far more
likely to sign a deal for desks or
studios at the centre they saw than
the customer who has to picture
these office spaces on their own.
This comes with a few problems.
Not only do customers need to see
these centres themselves, but in an
ideal world, there would also be a
well-informed sales or experience
professional right there to ensure
that they get the best possible
experience - someone to advertise
19
WeWork’s new tool,
SpacePort, is their attempt
at bringing the experience
right to the comfort of
whichever screen you
happen to be looking at.
each centre’s best features and
frame the client’s perspective of
your brand overall.
WeWork
WeWork’s new tool, SpacePort,
is their attempt at bringing the
experience right to the comfort of
whichever screen you happen to be
looking at. SpacePort is a dedicated
centre-level landing page that’s been
designed with the modern audience
in mind.
20
Each centre’s landing page opens
up with a few quick links to
information about the centre, along
with the tool’s newest gem— their
software-generated 3D virtual tours,
which works even for centres that
haven’t even been finished yet. But
a 3D render just doesn’t beat the
real thing.
This is why every centre that’s
already complete has a fully-fledged
360° virtual tour video to go right
alongside the previews of their
floorplans.
No longer will customers have to
wait for a seasoned community
executive to guide them around a
centre— in fact, they won’t even
need the centre to be opened yet,
since SpacePort is compatible with
concept 3D renders of their suites,
common areas, and even their
bathrooms that you can explore
yourself, just as if you were actually
visiting the venue itself.
Knotel
WeWork isn’t the only big-name in
coworking who has geared up for
technology-fluent customers that
they’re likely to see more of soon.
Knotel is another company that’s
upgrading its sales process for the
future by digitizing & democratizing
their tour process, as can be seen in
this interactive tool.
While the lack of colour and textures
makes their version of the software
a bit lacklustre in comparison to
WeWork’s, Knotel’s implementation
is still based on the same underlying
technology and performs the same
functions.

SpacePort Highlights
• You can view every floor’s
entire floor plan in full
detail, for every centre,
without exception.
• The software allows you to
pan the entire floor plan too,
allowing customers to take a
look at their potential office(s)
from every angle.
• These 3D renders also offer a
“walkthrough” mode, taking
the customer on the same
journey they would have
experienced when they visit
the actual centre— a full
centre walkthrough!
• SpacePort (and it’s competitors)
both also allow you to
bookmark your favourite desk
or studio, even your favourite
lounge or entranceway!

No longer will customers have to wait for a seasoned

community executive to guide them around a centre— in
fact, they won’t even need the centre to be opened yet

21
Should CoWrks
be recreating the
SpacePort experience?
CoWrks has made some strides
towards improving the technology
that delivers a seamless experience
to our members, but there could be
many more use cases that push our
offerings to their ultimate potential.
A SpacePort alternative could
certainly be one. Here’s how it could
help us:
• Early Previews: A SpacePort
equivalents would enable us to
present designs earlier than what
we currently can.
• Improved Feedback Loop:
Open up the possibility of
incorporating initial feedback
into each centre’s design. This
would offer our designers to act
on closed-loop feedback before
the start of development, and at
the very best, also enable them
to improve member experience
before they even begin using
their desks.
• Greater Reach: Digitizing and
democratizing this information
could offer a far larger pool
of customers the chance to
experience centres around the
world. Now, potential customers
in WeWork India can even
explore centres in countries
they’re about to visit and get an
understanding of the layout of
centres that they may choose to
work out of during their travels.
22
Most importantly:
• Faster & More-Efficient Sales
Cycles: A SpacePort-like tool
would offer our sales teams a
lot more of their most valuable
resource: time. SpacePort enables
sales teams to manage more
leads, and qualifying them faster,
without having a physical walk-
through acting as a bottleneck.
While physical walkthroughs
can never be (and arguably
shouldn’t be) eliminated as a
step in the member journey, the
value delivered to a potential
member so quickly in the sales
conversation is very compelling.
Recreating a concept like
SpacePort in the way that
WeWork has executed
this workflow is the
best way to claim these
advantages for ourselves.
The Knotel approach
would be an improvement
over our current position
as well, but a full,
detailed, well-designed
version of the same
software offers potential
members a richer and
more comprehensive
experience.
Real Estate Trends

The Big Picture

Flexible office spaces trends across the key
micro-markets of NCR, Mumbai and Chennai
Akshay Rao

DLF Cybercity

NCR • This indicates that demand for

workspaces will soon reach
saturation point even in Gurgaon,
• NCR has accrued over 24 million
pushing companies to turn
sq. ft. of new supply over the past
towards Noida to set up new office
year, opening up vacancies all
spaces.
over the market, primarily in
Noida (16 million sqft) & Gurgaon • Nevertheless, fresh new supply
(7 million sqft). is likely (based on projections)
in Gurgaon in 2019 as builders
• New supply in the overall
look to fulfil the micro-markets
market seems to be focused in
overwhelming demand for office
Noida, where there has been a
space.
significant amount of new supply
added over the past 1 year. • Rentals across most micro-markets
have stabilized as well, with
• While Gurgaon is still a
only a few high-demand micro-
hotbed for new companies
markets still seeing a year-over-
and additional workspaces,
year appreciation of rentals, most
absorption of existing supply has
notably Cybercity in Gurgaon and
been on a downward trend for
Aerocity in New Delhi.
the past 4 years.

23
New Delhi New Supply vs. Vacancy

Overall, New Delhi is a mostly- Connaught 470

stable micro-market for office space. Place 1%
Vacancy across all micro-markets 250
Aerocity
has remained fairly consistently 2.2%
downward-trending over the past
Nehru 200
5 years. New supply of assets has Place 6.5%
been limited across the market, with
the city seeing no new workspace Saket 190
9%
assets since 2016. However, with
absorption finally catching up to the Jasola 115
supply in markets like Jasola, Saket, 17%

and Nehru Place, 2019 is projected to

see additional supply in the market Rent Vacancy

after nearly 3 years of dormancy.

Micro-market Occupancy 1.1 Connaught Place

Despite having very stable rentals
overall in the recent past, the rent
variance within CP is the most
significant of all of Delhi’s micro-
markets; CP has just a few Grade-A
buildings and occupiers here are
primarily government agencies. Paired
with the high demand for the location
(Connaught Place is at the heart of New
Delhi’s central business district), any
Grade-A buildings in the area have
significantly inflated rentals. Despite
these quirks, Connaught Place has
Connaught Place seen decreasing vacancy over the past
5 years and most centres in the micro-
Saket market enjoy an average occupancy
of 85%.
Nehru Place
Notable tenants:
Jasola 91 Springboard (~600 seats),
Regus (~450 seats)
Aerocity

24
1.2 Saket
Quarter-over-quarter, rentals in
Saket have increased (currently
they sit at an average of Rs. 155 per
sq. ft). Of the micro-markets in New
Delhi, Saket has the weakest Social
Infrastructure — while the region is
well-connected via Metro and Bus,
it is a full 14 km to the Airport, and
there are fewer retail and recreation
spaces in Saket as compared to
the other micro-markets, making
it a sub-prime micromarket for
coworking players. However, the
few co-working players that have
opened in Saket are enjoying
saturated centres, with the average
occupancy clocking in at 85% for the
micro‑market.
Notable tenants:
Regus (~400 seats), Innov8
(~800 seats).
1.3 Nehru Place
Despite falling since 2018, vacancy
in Nehru Place has been on an
upward trend, year-over-year
despite no new supply entering the
market in the past 5 years. Vacancy
in the micro-market is currently at
~7%, with most centres averaging
70% occupancy in the last Quarter.
With dormant supply and decreasing
demand, rentals are projected to
decrease during the remaining of
2019, possibly extending into 2020
too, based on whether there is an
influx of new supply.
Notable tenants:
WeWork, Regus (~700 seats),
Paharpur Business Centre
(~900 seats)
25
1.4 Jasola
Jasola has seen nearly no change to
overall rentals for the past 3 years,
in addition to no new supply and
stabilised vacancy (~17%) over the
past 5 years. Despite being a relatively
new market, the demand for Jasola
does not seem to be significant
when compared to other markets
in Delhi like Aerocity, with centres
in the micro-market averaging 70%
occupancy across the board.
Notable tenants:
91 Springboard (~600 seats),
Awfis (~250 seats)
1.5 Aerocity
Without question, Aerocity is
currently the most in-demand of
the micro-markets on this list.
Since the last significant addition of
supply to the market (9,75,000 sqft
between 2016 & 2017), the micro-
market vacancy has fallen quickly
and significantly, currently sitting
at 2%. Centre occupancy has been
increasing quarter-over-quarter,
now averaging 80% overall. Thanks
to its massive popularity, Aerocity’s
rentals have seen steady year-over-
year escalations across the board,
with the average escalation holding
strong at around 15% year-over-
year. Unquestionably, among the
top contributors to its popularity is
its proximity to the Airport, being
just 1 km away from the nearest
entry point.
Notable tenants:
CoWrks (~800 seats),
Atelier by Bharti (~400 seats),
Avanta (~400 seats)
Gurugram Micro-market Occupancy
Rent vs Vacancy
190
NCR’s hotbed for companies has proven GCR
4%
to be a very hospitable home for flexible
140
workspaces. Regularly-added supply of MG Road
1%
assets has ensured a high absorption
140
rate year-over-year since 2015, with 2019 NH8
20%
seeing the lowest absorption till-date.
125
This is likely due to the supply inching CC
1.05%
towards saturation that has reflected
80
in new projections, which propose a SPR
26%
significant increase in new supply by the
75
end of 2019. GCR (E)
42%

Udyog 68
Micro-market Occupancy Vihar 10%

Rent Vacancy

affordable properties in the area have

seen the steepest increase in rentals
(an escalation of ~15% every 2 years).
Cybercity currently averages a per-
centre occupancy of 85%.

Notable tenants:
WeWork (~3500 seats), Space (~900
seats), Skootr (~1350 seats), CoWrks
(~900 seats)

Cybercity Institutional Area

MG Road Sohna Road
Golf Course Road NH8
Udyog Vihar GCR Extension
2.1 Cybercity
Despite already being a saturated
micro-market, Cybercity remains one of
Gurgaon’s most in-demand locations to
open up new office spaces. Vacancy in
Cybercity is consistently between 1%-
3%, leaving no room for more occupants
unless there is an influx of new supply.
The unchanged demand for the locality
has ensured that prices go straight up
year-over-year, with overall escalation
averaging 5%-6%. While that escalation
rate is not significant on average, the
variance of pricing has also drastically
decreased— meaning that most-
2.2 Golf Course Road
Despite a significant drop in vacancy
since the previous influx of new supply
in 2016, GCR appears to have stabilised
at ~5% occupancy since 2018. With no
new supply being added (or projected
to be added in the near future), rentals
for prime properties have continued
to escalate steadily (6% every 2 years),
while more-affordable assets have seen
a much smaller increase in overall
rentals (7% over 5 years). Though
largely a saturated micro-market, GCR
continues to be in demand for new
office space since there are several big-
name companies that have taken up
residence in the region.
Notable tenants:
WeWork (~1500 seats), Innov8 (~800
seats), CoWrks (~800 seats),
TEC (~100 seats)

26
2.3 Udyog Vihar
In spite of a regular new supply of
assets year-over-year (1,00,000 -
3,00,000 sq ft per year), Udyog Vihar
has seen a steady downward trend in
vacancy rates since 2016. Since this
micro-market houses largely industrial
companies, Grade-A assets and flexible
workspace options in this area are
a bit harder to come by (though still
prominently available). The micro-
market also remains in demand since
it is priced relatively lower while still
being in close proximity to the Airport
and prominent corporate sectors like
Cybercity, allowing Centres in this
micromarket to achieve an average
occupancy of ~70%.
Notable tenants:
GoWork (~8000 seats), WeWork (~2700
seats), 91 Springboard (~2000 seats)
2.4 MG Road
Even though it hasn’t seen new
supply in over 4 years, the MG Road
area remains a popular location for
workspaces since it hosts a significant
number of MNC’s corporate offices.
MG Road is also the primary road for
travellers going to Delhi, ensuring
high visibility and making it a
very useful micro-market for any
companies looking to set up their
offices with frequent inter-city travel
in mind. Though the area has a
fleshed-out Social Infrastructure, the
average occupancy of centres in the
area has remained at a consistent 70%.
Notable tenants:
The Circle (~3500 seats), WeWork
(~1500 seats)
2.5 Golf Course Extension
The GCR Extension serves as a major
alternative road to NH8 and connects
commuters to Faridabad, this micro-
market is not one with high demand.
27
The centres in the region average an
occupancy of just 60%, which is a year-
over-year increase in average overall
occupancy. Despite this, there has been
a steady influx of new supply over the
past 5 years; this combined with the
fact that this is a relatively new micro-
market indicates that most players
foresee this micro-market incurring
higher demand in the near future.
The lower rent & relatively lower
quantum of demand has resulted in
most workspaces opting for larger
floorplates with much lower densities,
allowing their occupants a much more
luxurious experience.
Notable tenants:
OYO (~1100 seats), Plus Offices (~1000
seats), Alt-F (~600 seats)
2.6 NH8
Since this region is extremely well-
connected (being the primary Delhi-
Gurgaon highway), this region has seen
the rise & maturity of several well-
established buildings along with some
high-profile tenants as well. Despite
these well-established buildings, this
micro-market continues to see a steady
influx of significant new supply (2019
is projected to see an influx of up to 3
million sq. ft. of supply). Normally this
would contribute to consistently-high
vacancy levels, however, NH8 appears
to be in demand; centres in the area
have an average occupancy of 80%
and the micro-market sees a steady
absorption rate every quarter. The
only downside to this micro-market
is the low availability of residential
catchments, resulting in higher traffic
levels in the area since most occupants
travel to this micro-market from
different corners of the city (or even
from New Delhi).
Notable tenants:
WeWork (~1500 seats), Awfis (~1200
seats), TEC (~400 seats)
 Powai, Mumbai

Mumbai to significant quantities of new

• Rentals in Mumbai, though high,
have remained fairly stable across
the market, with Navi Mumbai
even seeing a decrease in rentals
• While the rate of new supply
year-over-year (8% decrease in the
last 5 years)
• Mumbai has also seen an overall
increase in vacancy, with office
space across the city averaging
19%, though this is primarily due
supply being added across the
market (nearly ~26 million sq.
ft. over the last 5 years) rather
than due to a downward trend in
demand.
additions has begun to trend
downwards, the absorption rates
have remained stable, with the
market absorbing an average
area of up to ~5 million sq. ft.
every year.

Micro-market Occupancy
Rent vs Vacancy
1. Old CBD
75 Although yearly average rentals have
Thane 22%
remained largely stable, CBD rentals
110
Navi 30%
have actually decreased on a quarter-
135
over-quarter basis; this decrease
WS2 24% appears to have affected primarily
140 lower-grade and more-affordable
ES 18%
buildings, while premium Grade-A
150
WS1 23%
buildings saw little to no change in
overall average rentals. With no new
BKC 160
Periphery 28% supply having been added in the past
Central 230 5 years (and little to no new supply
Mumbai 10%
forecasted to be added in the near
CBD
250
future), vacancy in this micro-market
6%
has remained stable at ~7%.
390
BKC 19%

Notable tenants:
Rent Vacancy
McKinsey&Co, Bharat Petroleum, DBS

28
2. Central Mumbai
Despite new supply entering the
market in both 2018 and 2019 (with
more projected to be added into the
market in 2019), average rentals in
the area have continued to escalate.
However, while Central Mumbai has
seen a steady escalation in rates since
2016, Q4 2019 and 2020 as a whole are
expected to see lower average rentals
(thanks to the incoming new supply)
based on forecasted data.
Notable tenants:
YES Bank, Bloomberg, Franklin
Templeton Investments, DIAGEO,
SoftBank, CoWrks
3. BKC (CBD)
Even without any new supply
added in 2018 or 2019, BKC has seen
continued absorption of existing
supply, leading to downward-
trending vacancy in the area. With
existing supply dwindling, however,
this micro-market is likely to see
a small influx of new office space
supply by the end of 2019 (or by 2020
Q1). Premium-property rentals have
also continued to rise, currently at
~Rs. 390 per sq. ft., which indicates
a reducing escalation (from 17% in
2017-18 to just 4% escalation in 2018-
2019).
Notable tenants:
Alibaba Group, Elca Cosmetics, Actis,
Kotak Bank, Bank of America
4. Western Suburbs
While the entire micro-market has
seen significant new supply get
introduced every year since 2016,
there has been a more-concentrated
rise in supply (and concurrently, a
rise in vacancies) towards Goregaon,
where rentals have actually
29
decreased (12% drop) since the
addition of new office space supply
in 2019, particularly for premium
properties.
Notable tenants:
Samsung, Deloitte, Unilever, P&G
5. Thane
Thane has seen the largest change
over the past 1 year, relatively
speaking. In 2019, Thane saw
significant quantities of new supply
get added till date (5,00,000 sq. ft. of
office space supply), with another
~8,00,000 sq. ft. forecasted to be added
by Q4 2019. Thanks to this influx of
new supply, vacancy in the area has
shot up to 22% in 2019, along with
a 6% rise in rentals year-over-year;
indicating possibly an even further
rise in rentals during 2020 once this
new supply starts to get consumed.
Notable tenants:
Tata Consultancy Services, Tata
Capital, Aditya Birla Group, Chemter
6. Navi Mumbai
While premium property rentals
have remained completely constant
since 2016, Navi Mumbai has seen
a steady increase in rentals among
the more affordable office spaces
available. Considering premium
property rentals have been stable
despite new supply entering the
market every single year, signs
point towards these additions being
primarily affordable office space and
that it’s likely not Grade-A properties
that were being added.
Notable tenants:
Wipro, Reliance Communications,
Accenture, Capgemini, Hexaware,
UBS
 Chennai
With an overall vacancy of 11%,
Chennai’s demand has been
significant and both standard
office space players and co-
working players alike are taking
up significant amounts of space in
Chennai.
• Chennai’s CBD and Guindy micro-
markets have seen significant
additions of new supply,
with their escalating rentals
indicating that a significant
portion of the market’s demand
and in CBD -- although CBD still
has a significant % vacancy,
showing potential for further
closures in the area
• Considering its current supply,
OMR Zone 1 has the highest
relative vacancy, indicating
that demand may be leaning
towards other micro-markets like
Guindy instead.
Micro-market Occupancy
Rent vs Vacancy
65
OMR 2
23%

is concentrated in these micro- OMR 1

120
5%
markets.
82
Vadapalani
• Chennai has seen a total of 5.4M 7%

sq ft added to the office space 90

Guindy
market, the bulk of which have 8%

been added in the OMR and CBD CBD

110
13%
micro-markets.
• Chennai has seen the most Rent Vacancy

absorption of assets in Guindy

Chennai Skyline

30
1. Guindy
The fact that Guindy has the highest
number of coworking players active
in one micro-market should, in
and of itself, indicate how valuable
the Guindy micro-market is to the
overall Chennai market. Overall
vacancy in the area is consistently
minimal, despite new supply being
added even in 2019 (with 8,00,000
sq. ft. more projected to be added
by 2020). Guindy’s office spaces also
have the largest variation in rentals
(from just 6.5k per seat up to 30k
per seat), indicating that the market
is preferred by both premium
contenders as well as by players who
offer more affordable options. Its
proximity to the airport (just 8km, a
full 6km less than the next-nearest
micro-market) is likely the biggest
reason for the demand for this area.
2. CBD
Second only to Guindy in terms of
coworking players active, Chennai
CBD has over 19 coworking players
active in the micro-market. Despite
hosting the 2nd-highest rentals in
the entire city (rentals currently
range between 8k - 28k per seat),
CBD has proven to be the most
consistent in terms of the demand
over time, retaining a vacancy of
<15% over the past 5 years.
Notable tenants:
Thomson Digital, Workafella, Cove

Notable tenants:
Smartworks

31
Curation and editing: Sandeep Sharma
Editing Support: Karthik Kashyap
Visual design and layout: Rajashree Gopalakrishnan

For contributing articles, contact Sandeep Sharma or Kiran Hegde

32