Reforms key to incentivise coworking sector
Corporates making beeline to coworking spaces to cut costs and capital expenditure
The demand for coworking office spaces has seen tremendous growth in the last few years and the post-lockdown scenario is bringing in a wave of new opportunities for the coworking players. Medium-to-long-term fundamentals remain sound as companies seek out alternative options to reduce costs and capital expenditure. Now, more than ever, flexibility is crucial and hence coworking spaces, with their natural flexibility and inherent readiness to add value are best positioned to adapt and redefine the future of work and workspace.
Companies will strive to be agile and prefer to build more flexibility into their real estate portfolios. As companies look to resume business, redesigning and restructuring of existing real estate will pose yet another challenge, however coworking spaces will be able to respond to design changes required post-Covid-19 quicker and more efficiently than traditional office spaces. However, we have some important expectations from the upcoming Budget 2021 to further propel the growth in the sector.
Coworking has changed the very concept of the workplace today and the market scenario of the real estate industry. As coworking is playing a vital role in the economic growth of the country, the Government should recognise it under special schemes like REIT and provide tax benefits to handhold the industry for better growth. Financial support to start-ups would also create greater demand for coworking spaces.
As several entrepreneurs who opt for coworking solutions are early and mid-startups, the government could look at reducing the present rate of registration charges and stamp duty to register documents at registrar offices as high rates additionally burden them. This will give a fillip to both start-ups and coworking spaces. Presently, the rate of TDS applicable on coworking services is 10 per cent as coworking companies provide renting of both movables and immovables. As the industry is going competitive, it will be good if the rate of TDS on coworking services is reduced.
(The author is founder of 315Work Avenue, a coworking firm)