Smartworks Plans Rs 600 Crore Annual Expansion As Contracted Revenue Nears Rs 6,000 Crore

Smartworks plans to invest Rs 550-600 crore annually over the next three years as contracted revenue nears Rs 6,000 crore and large enterprises increasingly adopt managed offices, co-founder Harsh Binani told NDTV Profit. Binani said, "We had mentioned earlier about our intent to invest about 550 to 600 crores in this fiscal year to add capacity of close to about three to three and a half million square feet. We expect that this capex momentum will continue over the next couple of years, and we will continue adding this three million square feet every year."

The company aims to add roughly 3 million square feet of capacity each year, taking its operational footprint to more than 20 million square feet. Binani said the expansion reflects demand visible to the company. “We are not putting up the capacity of this new addition and hoping that demand will arrive. We are largely securing the supply because we can see this demand coming,” he said.

Smartworks is focusing on managed workspaces for large enterprises, including Fortune 500 companies and multinational corporations. Binani said businesses were increasingly treating flexible offices as part of their long-term infrastructure rather than an interim arrangement. “Large companies of the world and of India are looking at flexible workspaces... not as a temporary solution but as a mainstream enterprise infrastructure,” he said.

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Flexible workspaces are growing three to four times faster than the broader commercial office market, which is expanding at 7-8%, according to Binani. He said the category had developed rapidly since Smartworks started its business in 2017. “This category of ours was practically zero when we started the business in 2017 and in less than 8-9 years this has now become the largest category in the world with more than 14 to 15% penetration of the entire commercial office space market,” he said.

Demand is also broadening beyond information technology. Banking, financial services and insurance, healthcare, engineering and consultancy are now contributing to demand for managed workspaces, Binani said.

That shift adds to the company's revenue outlook as it prepares to expand capacity over the next three years. Contracted revenue is nearing Rs 6,000 crore, he said, pointing to the business secured by Smartworks.

Binani also said periods of uncertainty could increase demand for managed offices. He cited the Covid pandemic and the emergence of artificial intelligence as developments that encourage businesses to turn to such workspaces. “In fact, any uncertainty like COVID was one, the new AI wave is another; this fuels more demand for managed workspaces,” he said.

The company's expansion strategy centres on securing space to meet that demand, with large enterprise customers remaining the focus. Its planned annual capacity additions and investment programme are intended to support an operational footprint exceeding 20 million square feet.

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