We will grow to 50 lakh sq ft in five years: Meghna Agrawal

Providing smart business space in Bengaluru since September 2014 to start-ups, offshore development companies and small and medium enterprises (SMEs), IndiQube plans to expand their footprint to two other metropolitan cities of India. Its co-founder Meghna Agrawal speaks with Ateeq Shaikh about their growth plans.

What is IndiQube’s presence like in Bengaluru?

We currently have around half a million square feet across eight buildings. Another half a million square feet has been signed upas well. All the buildings should be ready by next year. Our annualised turnover is Rs 80-100 crore.

Which other markets are you looking to expand?

We want to tap all the micro-markets in Bengaluru and are identifying those areas. We will be looking at minimum two cities between Mumbai, Pune and Hyderabad. We have already started surveying the markets and will take a call depending on the availability of Grade A facility. We hope to have some of the spaces in either of the markets by June-July 2017.

How much will the new facilities cost?

It all depends on how many million square feet you want to do it. For example, for the next three to five years, the idea is to grow to almost 50 lakh square feet. Things can change, once we do our entire research. In the next quarter, we are looking to spend anything between Rs 100 crore and Rs 150 crore.

How do your services compare vis-a-vis the competition in this space?

Competition certainly exists but only in certain pockets. However, there is no player in the market offering all the services under one umbrella. Besides, we also provide value-added services. Unlike others, there’s bouquet of services that include business to business (B2B) and business to consumer (B2C) services. B2B services include internet leased lines, pest control, housekeeping, carpet cleaning, etc. In B2C services, there’s something like food court, employee transport, medical insurance, etc. Our food court can get converted in pubs at night and there are also events organised at these spaces. Because of economies of scale, we are able to provide services at the right price, which is a win-win situation for everyone.

What is the range of spaces provided?

It depends on the growth option. We believe if you grow, you grow with us. In fact, we can go to as low as one seat, if we see potential. For example, a chartered accountant comes to us with a team of five, s/he is not our customer. As of now, our largest client occupies 25,000 square feet and there is also a client with a single seat. We also have floating spaces available. For example, if one of our clients has a meeting that would be convenient at some other location and not where the office is, they can go to our other space only for that one meet.

Do you buy or lease out spaces?

We lease them for a period of 20 years, which can be renewed later. The initial 10 years is the lock-in period.

What is the ratio like to lease a space vis-a-vis refurbishment cost?

It depends from one location to another as well as the kind of building. But largely, the ratio is 2:1 for leasing cost and refurbishment. In Mumbai however, the real estate cost would be higher for obvious reasons.

Is there a minimum tenure required to lease the spaces?

We are very flexible when it comes to prices, we have per square feet model as well as per seat model. Our usual and average lease is for three years as we customise the spaces as per company’s branding, we add colour to it. As there’s capital expenditure involved for customisation, there is a lock-in period. If there’s a start-up, we have a pricing for them too that varies between before funding and after funding. So, once we get funding, the price will change. The idea is to catch them young. Even the office spaces are reducing, if earlier 100 square feet was needed per employee, now it has come down to 70 square feet per person.

What kind of customisation do you offer for workplaces?

We have provided standing workstations if there is demand, so that one can remain fit. Additionally, there are workstations connected with treadmills too. Another is having meetings along with cycling.