The economy is slowing down

The industry anticipates major game-changer announcements from the Union Budget for the digital and start-up sectors, says Himanshu Bindal, Co-Founder, Oneco.Work

What are your views on the demonetisation exercise carried out by the government?
There has been little clarity on the subject. The rates of commercial realty are coming down as a direct consequence. However, while the direct buying/selling market has witnessed sharp corrections, the rental office space business has witnessed no change. The realty space is awaiting the Union Budget for better understanding the implications and fallout of recent government policy initiatives. At the moment it is difficult to predict, for instance what the quantum of financial investments is going to be into the realty market space, especially the rental commercial markets where we operate our co-working business.

The direct fallout of the demonetisation move by the government has been its impact on the black money component which formed a substantial part of the real estate purchase deals, even going up to 80 per cent of transactions, right until demonetisation was introduced.

The commercial rental segment was not impacted due to the demonetisation since it is a white money only segment.

Give us some indication of your expectations from the Budget.
The industry anticipates major game-changer announcements from the Union Budget for the digital and start-up sectors. The government is going to bring policy initiatives and funds for start-ups. The economy is slowing down. The steel and cement industry has witnessed a slump, post demonetisation, with a sub 40 per cent demand being serviced today compared to the pre-demonetisation period. Government incentives are anticipated to take the industry out of its negative positions.

What about Modi´s demand for long-term financing for infra projects from the capital/bond markets?
Money should always be flowing to give markets a boost. The expectation for long-term financing for infra from capital markets is easier said than done. Currently, real estate is not traded daily on the bourses.

What is your outlook for 2017?
In the co-working space, we expect a boom time in 2017. Rental markets in Delhi, Mumbai and major metropolises in India where office based leasing and retail is practised will witness a boom.

We operate in the co-working sector and are able to treat commercial lease agreements in a manner that is distinct from the conventional sector that witnesses a longer lock-in period. Our sector is seeing a lot of new players entering the market. We offer greater flexibility to service the fast changing dynamics of the commercial rentals sector. Today there may be a five-member team working in an office space, which might morph into larger numbers of co-workers.

The lease agreements we offer afford convenience to quickly provide rental arrangements according to the changing dynamics. For instance, a one-month notice period requirement allows for quicker movement to keep pace with change in the workforce dynamics. Similarly, you do not require hefty amounts for leasing agreements that are customised to suit the needs of the co-working space. We ourselves operating out of Delhi and intend to foray out into the Mumbai and Mangalore markets soon to cater to this segment. By the end of 2017, we expect to have seated (serviced the needs of) 2,000 people in office spaces in these markets. As a tech-enabled company, the first thing that we do, while facilitating commercial spaces in the co-worker segment, is to install the computer systems even at the time of initial site development.

Research indicates a significant shift in infrastructure investment away from Western economies to the Eastern hemisphere. Are India, China and other emerging economies mature enough to handle the sheer incremental volumes of infra projects over the next decade?
This has to be good for the infra sector. Currently, 60 to 70 per cent of companies are suffering due to the weak demand in the infrastructure sector. Lot of developers in the segment are facing down cycles in the industry today.

Give us some more information about your organisation.
Oneco.Work is an end-to-end office space provider for entrepreneurs and start-ups. Offering premium co-working office spaces with great affordability and essential back-end services, Oneco.Work has the broadest range of facilities that meets the end-to-end requirements of start-ups of all scales and sizes. It is driven by its mission of enabling entrepreneurs to scale up their businesses with alacrity by offering them a conducive work environment. Eliminating one of the most daunting tasks experienced by entrepreneurs, that of leasing an office space, Oneco.Work was founded in October 2015 as One Internet.