Co-working office spaces are breathing new life into the commercial property sector
The co-WORKING office space trend is sweeping through the country’s commercial property market, and showing strong signs of escalated growth in the future.
It is already rivalling the traditional office set-up and looks set to impact office vacancies in this sector.
In Cape Town, for example, these offices are slowly on their way to becoming a booming trend. Lizelle van Rhyn, founder of Cape Town Office, a co-working space in the city, says at last count, there were 25 such spaces there.
Co-working or shared office spaces allow individuals who run their own businesses or work remotely to do so from a professional office space without .having to buy or rent their own office premises on long leases. With their own reception staff, boardrooms, equipment and coffee stations, these spaces offer countless benefits for those who usually work from home or coffee shops.
Van Rhyn, who started Cape Town Office in 2011 as there were no co-working spaces in Cape Town, says from then to 2014, a large number of shared office spaces popped up. This led to the company organising the first Co-Working Africa conference, which saw delegates from Africa, Europe and the US attending.
“That clearly demonstrated the appetite for both existing and future operators of this type of business. The growth is showing no signs of slowing down.” The office concept is also putting pressure on the country’s traditional office sector, which is already struggling with high vacancy rates.
“The flexibility of a month to month ‘lease’ has a tremendous impact on the growing business and the start-up, not to mention the cost saving of having all your needed infrastructures in place.
Risking a three-year commercial lease when you don’t know how the business will perform in the short-term is a massive consideration when choosing an office space,” Van Rhyn says.
Leon Breytenbach, head of business unit growth at Rawson Properties, says the company is seeing more service providers of such space popping up. The benefits of such an environment has led Rawson Commercial to open its own co-working offices in Sandton.
“Such a space offers a team environment for like-minded individuals, so we do see this trend continuing. Not only is there demand for this kind of product, but from a property owner’s perspective, these spaces give you higher rates per square metre than a normal office. We are getting near retail rates on this type of gross lettable area in South Africa.”
Although co-working spaces come at a higher rate per square metre, Breytenbach says “we do find entrepreneurs who can’t work from coffee shops and are tired of working from home” using them.
“They move into something that costs R2500 to R3000 per month while launching their business, but it comes with a receptionist, printers and other office equipment, boardrooms and a professional business address.”
In addition to users having all the necessary business equipment on hand, John Whall, chief executive of Heartwood Properties, which has partnered with shared office operators in developing such offices, says another advantage is the ability to network and collaborate.
“Tenants are usually entrepreneurial and good shared office operators encourage collaboration between tenants.” He says serviced offices can be viewed as a “hotel for offices”, and there is “ongoing demand” from small businesses well-suited to such spaces as opposed to traditional office spaces.
Pay only for the day
The co-working space trend is growing and adapting. This is evident from a new pay-as-you-go co-working space, Glee in Green Point
Designed and built by husband and wife Glen and Fee Ainsworth and a carpenter, Glee has been “carefully considered” to provide customers with an office experience that works for them.
“When Fee and I returned from London to South Africa in April, I needed a convenient workspace but wasn’t keen on taking out a lease. Having looked at options in and around Cape Town, I found payment plans were either short or long leases. Needing only two days a week in an office, this didn’t work for me,” says Glen.
So they created their own, offering pay-as-you-go rates from R250 per day, depending on the facilities needed. Meeting rooms can also be hired per day or hour.