Awfis Space Solutions Ltd. aims to shift its focus to tier-II cities for future expansion from its strong presence in metros and tier-I urban centres currently.
Amit Ramani, chairman and managing director of Awfis Space Solutions, said that the company’s focus will evolve from its current presence in Tier-I cities to a distribution format that will diversify its footprint further while at the same time maintaining growth.
“Currently, 90% of our operations are in tier-I cities and 10% in tier-II cities. Over the next few years, we expect this ratio to adjust to 85% in Tier-I and 15% in Tier-II cities, reflecting our strategy to balance expansion across different urban areas,” Ramani said in an interview with NDTV Profit, after the company's first quarter results announcement.
This comes against the backdrop of Awfis Space Solutions’ earnings report for the first quarter of the financial year-ending March 2025. The co-working space solutions provider reported a consolidated net profit of Rs 2.8 crore in April-June quarter, a recovery from a net loss of Rs 8.3 crore reported in the same period a year ago.
“The trend is moving in the right direction with strong numbers,” Ramani said, adding, “though we can’t make long-term predictions with certainty, the fact that we achieved profitability in the last quarter clearly indicates that we are headed in the right direction.”
He also highlighted the role of improved operating leverage and strategic expansion in driving performance. With the company’s network now spread across 169 locations, Awfis has seen substantial increases in Ebitda and margins.
Ramani said, “We have observed an increase in Ebitda margins from around 29% to approximately 30.7% and are committed to improving these margins further. Our revenue growth forecast is based on our existing trajectory.”
He added, “We’ve experienced significant improvements in operating leverage as we continue to open new centres. The margins are improving as we expand, reflecting the strength of our business model.”
Ramani also provided insights into occupancy trends. He said, “At the moment, managed aggregation accounts for 67% of our seats, with direct leasing agreements covering the remaining seats. In terms of our centres, it’s a 64% to 36% split. Seats are a more critical measure here. We project a shift to 65% managed aggregation and 35% straight lease in the future.”
“Overall, our blended occupancy stands at 71%, and centres operating for 12 months or more have an occupancy rate of 84%. This reflects our balanced growth in both adding new centres and maintaining strong occupancy levels,” he added.
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