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What office owners need to know leasing to co-working spaces

By Greg Bell

Despite WeWork's infamous fall from grace last October, the exciting landscape of co-working spaces continues to evolve, with co-working remaining a fast-growing segment with strong demand.

The 2019 Australian Coworking Market Report by Office Hub analyses the supply and demand in the co-working industry across all major Australian cities and compares it to the previous year's figures and findings. It also predicts the future of co-working in the country.

Some of the highlights from the 2019 report include:

  • 41% increase in supply pushing average desk rates down across all markets.
  • Continual growth in the co-working market, as flexible office solutions become the new norm and conventional leasing becomes less desirable.
  • Evidence of the rise of niche and industry-specific workspaces as providers strive to stay competitive.
  • 39% of deals were peer-to-peer shared.
  • 80% of Office Hub enquiries requested private office space.
  • 73% of new flexible workspaces were located outside of the CBD.
  • 40% of businesses enquiring on co-working were established companies experiencing static business growth.

So what does the future look like for co-working in Australia?

According to the 2019 Australian Coworking Market Report by Office Hub, 2020 is going to be a dynamic year for co-working spaces! In an exciting and ever-evolving industry, the report predicts a likely increase in industry-specific megacentres with state-of-the-art fit-outs – think big, bold and beautiful! The report suggests that the future is all about collaborating and networking with like-minded businesses in environments tailored to specific business needs.

The growing demand for flexibility

The CBRE 2019 Australian Office Occupier Survey found that several societal and workplace trends indicate the growing need for flexible co-working office spaces. Flexibility in the time, day and location of where and when people work continues to be a significant influence that will shape the future of workplaces.

Citing data in Forbes, the report stated: "92% of millennials identify flexibility as a top priority when job-hunting. – as employers evolve their policies to match demand, this creates further challenges in accurately predicting the demand and utilisation of workspace. The next generation of flexibility may see teams establishing satellite hubs in co-working centres, closer to their homes or a client/project site."

The rise of the 'gig economy'

Another major driver of the co-working industry is the "'gig economy." Three-quarters of CBRE's survey respondents used contractors and freelance workers while 25% expected to use more in the future. What's more, according to the Mercer Global Talent Trends 2019 Report, as many as 80% of executives expect contingent and freelance workers to replace full-time employees in the coming years.

With more "gig workers" creating uncertainty in office head counts, co-working spaces are a natural solution, the CBRE research concluded.

Coworking hits the suburbs

With lower rents outside of CBDs, localised flexible working and greater access to large-format spaces, reports predict a rise in high-tech innovative co-working facilities popping up in the suburbs. It is obvious that people want to work closer to home to avoid lengthy commutes, and this has been made evident by the significant increase in demand for metro-based co-working locations.

At Ray White Commercial Gold Coast, we see our role in property management as partnering with you, our clients, to help break down your investment decisions and maximise your wealth from your commercial investments. For more information and guidance on leasing to co-working spaces, contact us at +61 (7) 5555 8600 or at info@rwsp.net today.

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