Flexible office space, or coworking, is the fastest growing phenomenon in the global real estate sector. Its popularity with independent professionals and start-ups continues to grow and increasingly, it’s attracting interest from major corporations.
Pundits are predicting that by 2022, more than five million people across the world will be working in collaborative coworking spaces managed by third-party service providers.
“Space as a service” is gaining traction in South Africa
In South Africa, “space as a service” is a rapidly developing business sector that’s gaining traction in the country’s prime business hubs. Nascent companies like The Workspace are reporting high occupancy rates of up to 80 percent.
With a projected growth rate on par with the rest of the world, demand may soon outstrip the existing supply of coworking offices in premium business nodes like Melrose Arch, Morningside Manor, Sandton, Midrand and the Cape Town CBD.
Exponential growth… everywhere
In the United States, the coworking sector has experienced a meteoric growth rate of around 23 percent year-on-year for the past eight years. According to recent statistics, the number of people operating out of coworking spaces is expected to almost double, from 542,000 in 2017 to more than 1,08 million in 2022.
Europe has more than 3,000 coworking centres, and in cities like Hong Kong, New York and London, flexible office space providers have taken over entire office blocks in an effort to keep pace with demand.
Coworking is equally popular in Australia. In Melbourne, the coworking industry has proved exceptionally popular and, at 27 percent, the state capital of Victoria boasts the largest year-on-year growth rate of coworking centres in the world.
Why coworking office space is soaring in popularity
Coworking has benefits in terms of costs, convenience and flexibility.
Instead of sinking major capital into traditional office space, small companies and individuals can access prime office space and facilities on demand, with no set-up costs or long-term obligations. They can also easily scale their operations up or down, without requiring expensive office relocations.
Shared work space also facilitates collaboration and sharing of ideas, resources and opportunities.
These advantages are perfectly aligned with the following current trends:
- more and more people are working as independent contractors or freelancers, or starting their own businesses
- companies worldwide are recognising the need to be more agile, as a matter of survival
- networking with others is emerging as a key to success in the digital age.
Flexible space attracting major corporations
More big businesses are starting to take advantage of the ease, convenience and scalability of coworking.
Without the set-up and management burden of traditional commercial rentals or purchases, large corporations can focus their time and resources on core areas of business, leaving the day-to-day running of functional, well-designed work spaces to specialist coworking providers.
With agile and independently managed work space as an option, big business can develop a practical real estate strategy that minimises costs and maximises networking and collaborative work opportunities. Global giants like Microsoft and HSBC are among those already benefitting from the coworking model.
Key benefits of coworking
These are some of the key advantages of coworking:
- cost savings; coworking is much cheaper than traditional office space
- a sought-after business address, with well-appointed office space in prime business hubs
- no long lease; instead get work space on demand, with flexible month-to-month rental terms
- a ready-made business network; shared office space encourages shared ideas and collaborative partnerships
- happier, more structured work life; coworking is less lonely and more motivating than working from home, and allows a healthier work/life balance
- access to high-end resources, business services and infrastructure, without any of the set-up or maintenance costs.
Coworking at The Workspace
We believe there are solid reasons for the unprecedented growth in the coworking industry, in South Africa and elsewhere. Given the way the modern work world is evolving, the coworking model simply makes good sense.
The Workspace offers competitively priced coworking packages at branches with exceptional facilities and décor, and friendly staff. All our clients have access to meeting rooms, boardrooms and a range of business services.