When companies recall their employees back to their offices, they must offer digitally enabled offices supporting the modern workforce. The flexible workspace sector in India experiences rapid growth as the top five providers post a 30% to 60% revenue growth. Neetish Sarda, founder of Smartworks, pointed out that they pivoted to the managed space model, targeting enterprises as the primary stakeholders. When offices were closing down everywhere, Smartworks was able to expand. This strategic business decision has helped Smartworks thrive with 8 million sq. ft. of managed office space in India.
Rise of Flexi Workspace in India
Smartworks is on an accelerated growth path due to the huge demand increase for flexible office space post-pandemic. As work from home is becoming a thing of the past, enterprises have started following the hybrid working model. For Smartworks, enterprises are responsible for about 90% of its revenue, and the biggest provider of managed office space in India is back with a bang. From FY22 to FY23, the revenue has doubled to Rs. 710.3 crore from 360.2 crore.
Neetish Sarda has always been confident that offices would not die after the pandemic. Smartworks expanded its footprint from 10 to 14 cities in the past year. During the pandemic, flexi space providers in India struggled to continue their operations because offices suddenly became obsolete. Even though demand was expected to increase after the pandemic, Sarda was overwhelmed by the skyrocketed need for modern workspaces.
What this means is that enterprises are looking for tailor-made office spaces that are easier to manage. The flexible office space future guarantees a highly productive workspace for companies while keeping operational costs low. Smartworks will manage the office space, while enterprises will pay for the lease. Sarda acknowledged that they changed their business strategy to move to campus-managed solutions. Rather than managing independent floors in the building, Smartworks now manages large campus-like structures that are independent and completely customizable.
This offers flexibility to enterprises looking to expand their services for employees. This model is ideal for a sustainable approach as Smartworks successfully negotiated on capex and added more amenities that became crucial for a tech-enabled work environment after the pandemic. Employees were at ease when they worked in offices managed by Smartworks because Neetish Sarda had a team to handle everything from grocery deliveries to cab services, gyms, and more.
Personalized Office Space for Every User
Smartworks looks beyond the domination of IT and associated services to contribute to the growth of flexi office space future. Global automobile players who attempt to capture the Indian market now account for 12% of Smartworks space capacity. Neetish Sarda originally thought that IT and IT services would dominate. But now, every segment of business sees value, flexibility, and cost savings with managed office spaces. One key challenge for Smartworks is balancing growth with operational excellence. The company now manages over 7.2 million sq. ft. in FY23, up from 1.9 million in FY20. The leaders hope to close FY24 at a massive Rs.1,100 core revenue and Rs. 150 crore EBITDA.
Smartworks Growth Trajectory
Neetish Sarda is aware that they must be cautious in scaling up. He added that they are working on standardizing operations to maintain sustainability in business. Rather than expanding their footprint to hundreds of cities, their strategy is to deepen and widen service offerings. Smartworks is not planning on expanding rapidly to more cities. The plan is to confine managed space in India offerings to 14 cities and offer hyper-personalization and advanced technology integration while managing campus structures.
Investors and promoters trust Smartworks, enabling the managed office provider to formulate an active plan to hit 30 million sq. ft. in the next four years. Work smarter, not harder, with Smartworks. Our modern, well-equipped offices are designed to promote collaboration and innovation, helping your team reach its full potential. We take care of everything from housekeeping and maintenance to high-speed internet and cafeteria services, so you can focus on what matters most.