GODREJ PLANS TO FORAY INTO CO-WORKING SPACE
The Godrej group is foraying into coworking spaces through its fund
management arm Godrej Fund Management (GFM). The real estate private equity arm of the group plans to set up its own brand of co-working spaces in its office properties to tap the future demand for such spaces. RAGHAVENDRA KAMATH writes
The Godrej group is foraying into co-working spaces through its fund management arm Godrej Fund Management (GFM).
The real estate private equity arm of the group plans to set up its own brand of coworking spaces in its office properties to tap the future demand for such spaces.
Though the co-working segment was hit hard during the pandemic, the demand for such spaces is expected to grow in the coming quarters as corporates and individuals look to save on property costs, said consultants. “We are exploring co-working spaces in our office properties. We will use our own capital and resources to set them up. There will be a seperate team for this,” said Karan Bolaria, managing director (MD) and chief executive officer (CEO), GFM.
GFM has five million square feet across office properties in Mumbai Thane, Gurugram, Pune and Bengaluru. It plans to set up three million square feet more through its new fund.
Typically, a 5,000 square feet property will cost between ~1.5 crore and ~2 crore and fitout costs will be ~3,000 per square feet. Rental costs are additional, the consultants added.
GFM recently raised $200 million from Netherlands-based APG Asset Management for its $500 million office property fund. This is the first closure for the fund. The group has put in $50 million in Godrej Build to Core (GBTC)-II fund.
The fund manager plans to do the second and final close by the end of the year. The fund manager is also looking to invest in data centres, he said.
“We are planning to set up such services as we believe occupiers will want them in the future. For example. occupiers can plan less number of conference rooms if they are made available to them in the building or have access to these facilities as and when required,” Bolaria said.
These services provide smaller and more flexible lease structures to new occupiers, who would, otherwise, not be able to access the properties.
In many cases, occupiers prefer fitted-out spaces with good facilities and management services rather than having to arrange their own.
Currently, Wework and Cowrks are the leading co working spaces. Canada-based Brookfield Asset Management recently bought Cowrks from Bengaluru-based RMZ group.