Please brief us about TEC and its working structure. How many working centers do you currently have in India?
The Executive Centre (TEC) is Asia’s premium flexible workspace provider with over 135+ Centres in 32 cities and 14 countries across Greater China, Southeast Asia, North Asia, India, Sri Lanka, Australia and the Middle East. We have the third largest serviced office business in Asia with annual turnover in excess of US$275 million. TEC entered India in 2008 with its first property in Mumbai and at present we are operating over 8000 desks across 30 centers and 9.35lakh sq ft at prestigious grade A addresses in Mumbai, Gurugram, New Delhi, Hyderabad, Bengaluru, Chennai and Pune.
We offer a range of services and have a customized approach for all clients. We primarily offer exclusive workspaces which are Enterprise Solutions, Private workspace and shared workspaces which are coworking spaces and virtual offices. We have used our experience of over 25 years to build a community and expanding global network. Each centre offers a prestigious address with the advanced infrastructure to pre-empt, meet, and exceed the needs of our ambitious members.
Please share your experience about working in India.
For TEC, India is one of the most important and crucial market. Our journey has been a very interesting experience, when we entered the Indian market in 2008 there were just one or two players in the market and it was considered a niche industry. Over the years, the industry has witnessed huge growth in terms of increased foreign investments in our country and infrastructural developments helping big multinational corporations to choose India as their office hub. Also, with E-commerce exploding the Indian service market, clients required bespoke solutions, customized services and spaces. Organizations have started adopting the flex first approach as a more permanent and convenient option. Most companies now are adopting the hub and spoke model which not only reduces commute and travel for employees but builds on the concept of convenience and flexibility. More importantly, the current disruption has made low density floor plans an important criterion to maintain safe social distancing. Low density floor plans have been a long-standing quality SOP for The Executive Centre, which has made it easier and more cost effective for us to implement safety norms in our spaces.
Please brief us about the changing trends in workspaces and how do you see the opportunity in India?
Since the inception of the concept of flexible office space and coworking culture, there has been rapid expansion in the most coveted locations across the country driving organizations towards a more decentralized structure. Flexible workspace is all geared up with positive sentiment to offer companies/ clients a more adaptable work environment basis the new requirement and conditions. Given the current standards for the new normal, the flexible workspace industry has become more relevant than ever. Companies will rely on flex space as they plan to transition to low density floor plans and socially distant workplace policies. Organizations are looking at flexible workspace as a more permanent solution across major cities in the country.
We as a company are bullish on the demand for flexible office space post COVID-19 pandemic as corporates will look to cut capital expenditure on setting up their own offices. This leads us to believe that most companies will take on a hybrid model with a flexible structure, one that allows for a mix of time in the office and at home. We see privacy and convenience taking precedence and greater convenience and efficiency through technology to support productivity.
These days most of the organizations are adopting the flex first approach. How do you see it and why is it important?
The flex workspace scenario serves as a new staple diet for the office space category. We are noticing companies changing the way they take up space and adopting a flex-and-core strategy, which is a model that can be tailored to suit the size and needs of the organization as we move into a “new normal”. We have clients such as Facebook and Twitter with us and have recorded 30 percent growth annually in Asia Pacific, including India. So, the segment looks very promising with steady growth. With the need for premium offices increasing, we at TEC will continue to invest on business expansion to meet this demand.
With the co-working segment growing rapidly in India we strongly believe that the trend is likely to continue despite the short-term disruption caused by lockdown. According to a Cushman and Wakefield report released in November last year, the demand for flexible workspace in India is estimated to jump five times by 2025 to 130-140 million sq ft. Our priority is to help our members/customers grow and provide them with spaces, no matter where they need us. We grow with them and vice-versa. We will be investing over Rs 100 crore as capex to set up five new co-working centers across Bengaluru, Gurugram, Chennai and Pune. We have already taken on lease nearly 2 lakh sq ft area of office space to start these facilities. These five centres, which have a capacity of around 2,300 desks, would become operational by March next year.
Please share your performance this year specially during COVID pandemic.
For the year ended 2019, TEC reported a revenue of Rs 260 crore in India and as of June 2020 we clocked 27% growth in India revenue during H1 (around Rs 150 crore). Our India revenue stood at USD 16.1 million (around Rs 119 crore) in the corresponding period of the previous year.