Co-working spaces are gaining in popularity
The co-working space in South Africa has seen tremendous growth since its inception in early 2000. From small entrepreneur start-ups to large international corporates, convenience and the desire for exciting workspace experiences is what continues to drive demand.
The worldwide co-working floor space, as a percentage of all commercial floor space, will grow from the current level of around 1.5% to about 15% in the next 10 to 15 years, estimates Andrew Utterson, director of Heartwood Properties and former chief executive of The Business Centre Group.
He predicts that co-working locations may also start appearing in vacant retail spaces as the move to online retailing accelerates. Convenience, mobility, flexibility, choice and a sense of community will continue to drive future workforces and millennials to demand co-working spaces.
With technology forming the backbone of all these offerings, most co-working spaces will be made up of a combination of cubicles, open shared spaces and private offices, Utterson says.
“More of the larger property funds are also starting to take notice and are either testing the water or partnering with established operators to fill their vacant spaces.”
Worker experience is a major factor in distinguishing co-working spaces and the overall experience, multitude of services and sense of community co-working spaces offer that makes them more attractive.
He says the deployment of managed new technologies, high-speed internet and customer-specific IT solutions make most co-working spaces more convenient for potential clients.
He says co-working spaces or serviced office businesses are hospitality-type businesses and have a similar service ethic to that of hotels. “There is an emphasis on good customer service and a quality client experience. In comparison, buildings that offer shared spaces and have no management of these spaces are essentially boxes for rent.”
Utterson says co-working influences how buildings are designed and built. Co-workers demand a quality experience from their working environments, such as fashionable interiors with interesting or fun breakaway zones, hotel-style reception and ablutions, excellent security, healthy food options, leading coffee brands, high-speed internet and professional support staff.
“More and more new buildings are being designed with the potential to host a successful co-working operator should the opportunity arise, including shopping malls.”
Vacant retail space is ideal for accommodating co-working. With so many of the bigger retailers not requiring huge floor space, thanks to online shopping, many retail spaces are empty.
He says retail spaces want customers with money in their pockets walking around their centres, and co-working clients fit this profile “perfectly”. “They are normally higher LSM types who will spend money in restaurants and shops. I’d expect most new retail centres to be making design plans to accommodate co-working as part of their tenant mix. Retail centres also normally have ample parking, which is a big plus for co-working.”
Utterson says there are now more than 100 co-working locations across South Africa and around 14 000 sites worldwide. This number is likely to grow to more than 21000 sites by 2022.
But it is not only market leaders who will lead this growth – smaller co-working providers will also find a sizeable space in the market with big organisations slow to change and not able to fill niche markets.
“Co-working is here to stay and will influence more thanthe way we work and interact with each other. It will ultimately see building design and construction evolve to meet this growing sector.”