Simpliwork Invests Rs 750 Cr to Expand Flex Workspace Portfolio; plans to raise Rs 2,800 cr
Managed flexible workspace provider Simpliwork Offices plans to invest Rs 750 crore in the next financial year to expand its portfolio and raise up to Rs 2,800 crore of equity and debt for future growth. Based in Bengaluru, Simpliwork Offices was established in 2018 and currently has an office portfolio of approximately 4.2 million square feet with approximately 50,000 desks in eight major cities. Salarpuria Sattva, one of the country’s leading real estate companies with a large presence in the office market, has a 50 percent stake in Simpliwork Offices. Kunal Walia, the founder and CEO of Simpliwork, holds the remaining shares along with a few other investors. In an interview with PTI, Walia noted that flexible office leases have increased in calendar year 2022 and demand from large companies remains strong. Total office space occupancy exceeded 45 million square feet last year after two years of slowdown due to the COVID pandemic, he stressed. “Specifically, within this demand, we’ve seen a significant increase in flexible space leasing activity,” Walia said, adding that flexible space demand’s share of total office leasing has risen to 16-17 percent. He mentioned that one in five large companies are now considering flexible workspaces as a serious option for their expansion plan. When asked about the expansion plan, Walia said the company aims to grow its portfolio to 6.5 million square feet by March 2024. This will require an investment of around Rs 750 crore, he added. “We have identified Calcutta, Noida, Pune and Chennai as major growth hubs. We are primarily relying on these four cities to drive our growth,” said Walia. To fuel future growth, Simpliwork Offices also intends to raise a significant amount through a mix of equity and debt. “We will be considering approximately $250 million to $350 million over the next 18 months. Part of that will be equity while the rest will be loans,” Walia said when asked about the fundraising plan. He said the company is in talks with private equity players. Currently, Simpliwork is represented in Bengaluru, Mumbai, Pune, Gurugram, Noida, Hyderabad, Chennai and Kolkata. “Delhi-NCR is our largest market, followed by Hyderabad,” he said. Walia said the company is very optimistic about the Kolkata market, where it made a foray in June last year. In Kolkata, it currently has a portfolio of about 1,80,000 square feet. “We will try to double this portfolio. In fiscal year 2023-24, we will have approximately 0.5 million square feet of space in Kolkata. We are currently one of the few notable flex players in Kolkata,” he said. In Kolkata, Walia said, demand is clearly coming from very large outsourcing companies looking for talent. “A large population, almost 35 to 37 percent of which is in the eastern part of the country, has operated from technology centers in Hyderabad and specifically Bangalore.
“With post-COVID changing work models and the adoption of many bespoke strategies, companies are looking to provide office space closer to where their employees live,” he noted. For the eastern part such as Orissa, Jharkhand, Bihar, West Bengal and the north-eastern states, there is a sizable population, according to Walia, for which Kolkata is the only major urban center. “So we see a lot of new companies coming to Kolkata for the first time ever. For most of them we are their expansion partners and we are building their first centers in Kolkata,” he said. Walia said that the attitude in Kolkata was also quite strong. Similarly, Simpliwork in Noida is looking to expand rapidly, targeting to reach one million square feet in three years from approximately 2,20,000 square feet currently. When asked about the company’s revenue, Walia said it’s growing at strong double-digit growth every fiscal year. However, he did not provide any information about the company’s income.
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