Flexible office operator Simpliwork Offices (partnered with Salarpuria Sattva Group), plans to invest Rs 650crores over the next two years to capitalise on the accelerated market demand for flexible enterprise spaces following the pandemic.
Simpliwork witnessed a 5x growth in turnover in FY 20-21, with a revenue run rate of Rs 300 crores and a committed order book of close to Rs 1000 crores.
“We are currently witnessing a significant uptick in demand for flexible workspaces as companies continue to show reluctance towards capex spends on non-core activities. We delivered two of the largest flexible workspaces during the pandemic last year; a 600,000 sq. ft.office space in Hyderabad and another 450,000 office space in Gurgaon, ” Kunal Walia – CEO & Founder, Simpliwork Offices, said.
Currently, the Bengaluru-based company is in talks with prospective investors to raise funds to further expand its geographical footprint. They plan to double the inventory to 6 million sq.ft. by the end of 2023 .
Currently 80% of Simpliwork’s business comes from very large enterprises with requirements of over 500 seats. “Our business model was uniquely positioned to survive the downturn caused by the pandemic last year. We are currently profitable and are looking to raise funds specifically to capture increasing market share in the flexible workspace segment, along with geographic expansion?” said Walia.
Simpliwork achieved profitability in FY 2021-22, and continues to enjoy industry leading EBIDTA margins. For FY 2021-22, the company is estimating topline revenues of Rs 450-500 crores with net positive EBIDTA.
The firm entered both Mumbai and Chennai this year and is aiming to have its first international centre signed up in H1 2022.
“We believe our model is uniquely positioned to capture the significant increased demand for flexible workspaces, and our asset light model along with proprietary technology sets us up for a public listing in the next 3-5 years.Though we are only three years old, we already have a 20% share in the overall leasing market pie, ”he said.
The flex workspace segarment in the last quarter (July – September 2021) indicate a complete resurgence in demand, especially, since there is very limited availability of Grade A properties.
“The absolute spend in office spaces has gone up by 25-30% in the last few years, but we need to ensure that the RoI more than justifies these office spaces, as we go forward. That is a continuing discussion for us, at Simpliwork, ”said Walia.
The Indian market has grown by more than 100% as compared to the pre-COVID period. While two years ago, co-working and flexible workspace management companies made up for around 7% of the overall leasing in India, today,they account for 18 to 20% of all corporate leasing in the country.
Currently, it has 27 centres in India, with Hyderabad being its biggest market, and Chennai the most recent one. The company is also present in Bengaluru, Mumbai, Pune, Delhi and Gurgaon.The company has received a rating of A – from ICRA.