Real estate as its core business, Vatika Group has diversified widely since its inception in 1986. Venturing into sectors like business centres, hotels, hospitality, restaurants, schools, facility management, healthcare etc. the company has built a reputation over the years. After setting up business centres, a blessing for mid-sized businesses, the company now has plans to offer space solutions for start-ups. Backed by exponential growth numbers, cashing in on opportunities to expand, Vatika Group believes to strike while the rod is hot. Entrepreneur traces the group’s growth trajectory and upcoming projects in a tête-à-tête with Vineet Taing, President, Vatika Business Centre.
Vatika Group started their business centres in 2004, a concept which was alien at the time. Typically, a business centre offers a fully furnished serviced office facility for growing businesses. Businesses can
list out their requirements, including office size, number of workstations etc and accordingly get a suite to begin operations. With business centres, a company can expand and contract within a day’s notice.
Growing at 60 to 70 per cent in the last two years, the group has about 13 centres in the country, sitting at occupancy of over 90 percent. Talking about these plush business centres, Taingsays, “Primarily, this concept was for businesses that wanted to expand, have their offices in different regions, also startups which wanted to grow. This is viable for start-ups, especially in the IT space as they get projects overnight and have to sustain themselves. They needed space immediately.”
According to Taing, 50 per cent of their business comes from mid-sized companies, 20 per cent from Fortune 500 companies and 25 per cent from start-ups. Vatika Business Centres are located in 8 major Indian cities. The aim is to open 42 centres by 2020.
Business Centres vs Licensing
Finances are a crucial element for a business, especially for mid-sized startups. The stakes are high, one needs to take calculated risks at least when it comes to money. Signing a leasecontract for a fixed time with additional infrastructural and operational costs can be taxing for a business. This is where Vatika’s Business Centres ease the task.
“At business centres you can move in for 15 days, one or six months or more. If you expand overnight and add more people, you can get a larger suite in the same business centre. If you require a conference room for a day, you can pay for that one day.” With leasing the costs are high and it becomes difficult to sustain.
Good News for Startups!
Achieving a strong footing with their business centres, Vatika Group has interesting news for start-ups. The group will launch co-working spaces for budding entrepreneurs. Taing, feels the existing co-working spaces are not living up to the expectations.
“None of the co-working spaces are currently 100 per cent occupied. That is also because startups which do not get funding for 3 months move out or shut down. Out of 100 businesses starting every month, only two-three per cent succeed. There is a very fast turnaround in this area of start-ups.” This coworking area will have a large open space as opposed to suites for two to three people to work.
The Future Holds Well
The company is also working on solarizing their existing and future projects and has already started the transformation. Vatika has also been associated with GIC, Goldman Sachs, Baer Capital and Wachovia and has plans to look at FDI for their business centres in the future.
With its business centres, the company is looking at locations like Sri Lanka, Dubai, Singapore, Bangkok and Hongkong. “We are trying to focus on areas which are close to us and have demand,” adds Taing. The company also plans to expand in tier-2 cities, including Nagpur, Jaipur, Chandigarh, Vizag and Ahemdabad.
With edgy office design, premier locations and customization, one waits to watch whether this co-working bet will resonate with startups.
This article first appeared in the Indian edition of Entrepreneur magazine (August 2016 Issue).