Established Co-Working Players Will Continue to Attract Marquee Occupiers

SheshRao Paplikar(CEO & Co-Founder BHIVE Group) - March 26, 2023 - - 0 |
The Indian co-working industry has been growing by leaps and bounds on the back of a cost effective offering, burgeoning start-up base and rising office rentals across business districts to name a few. As one of the leading players in this space, we have grown significantly over the years and built a strong base of leading occupiers. It is one of the best years for our Industry, with 30% absorption happening through co-working space.

This growth is likely to continue, Many companies have understood about co-working and now we don’t have to convince why to take co-working instead of traditional space. However, the market is expected to see a correction with the global economy and a funding crunch. Having said that, established players like BHIVE will continue to attract marquee occupiers with their differentiated offerings of the right location, property and amenities, thereby leading the growth of the co-working industry.

As a fintech platform that helps people invest into commercial real estate and related investment opportunities, we are witnessing a positive trend of referrals and repeat investments. This trend is aided by the radical change in the thought process and perspective of millennials compared to the older generations. While traditionally, the investments in real estate were made for security, now the young generation views it purely as an investment.

Today, Alternative Investment Funds (AIFs) provide access to institutional quality assets, generating good IRR.  We have received commitment of INR 240 Crore for our 400 Cr AIF Scheme – BHIVE Commercial Real Estate Opportunities Fund Series 1. We will deploy this capital to curate prime commercial real estate properties. The category II close ended fund will offer a unique opportunity to high net-worth individuals (HNIs) and Family Owned Businesses looking to participate in the commercial real estate growth story.

According to industry average, investments in commercial real estate yield a return in the range of 8-11% as against 2-3% returns in residential real estate. In contrast, BHIVE’s AIF II is helping customers generate double the yield of 20-24% with relatively low investment risks, which is a first in the industry. Since the capital is deployed in fully completed properties with all approvals, the risk to principal invested is also low. There is no construction or approval risk which was the bane of real estate investment schemes launched by other funds earlier.

AIF II  will offer investors the opportunity to invest in Grade-A premium office spaces and earn attractive returns even with small ticket investments in line with our mission to make the highest quality commercial real estate properties accessible to retail Investors with superior risk-adjusted financial returns.

The intricacies of the real estate industry are a little difficult to understand or predict. Commercial real estate is doing really well. But there are so many segments in commercial real estate be it malls or hotels or office spaces or warehousing. The shift and demand are significantly higher and might continue to grow in the next few years. Office space and warehousing are also growing. However, one cannot make a general assumption and before you go for any investments, it is important to understand the nitty-gritty of it.

As told to Vinod Behl, Editor, Torbit Realty 

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