Category: Data

“The growth of flexible workspaces will continue as companies demand greater agility with reduced risk”

Founded in 1999, The Instant Group rethinks workspace on behalf of its clients, injecting flexibility, reducing cost and driving enterprise performance. Instant places more than 7.000 companies a year in flexible workspace such as serviced, managed or coworking offices workspace (Instant Offices hosts more than 12,000 flexible workspace centres across the world).  The Instant Group employs 230 experts worldwide. We asked John Williams, Head of Marketing of The Instant Group, about his vision of the evolution of the international flexible social workplace market.

How is the conventional property market anticipating the rise of the demand for flexible workplaces?

John Williams, Instant Group

We are witnessing a seismic change in the flexible workspace market.

Clients are demanding more from their office space and the growth in operators is serving this increasing and changing demand. Landlords are entering the market with a variety of flexible office solutions and there will continue to be consolidation of the market where there are opportunities for growth and a shift to an outsourced office model.

There is a clear difference in terms of market maturity between the UK, a handful of digital startups friendly metropoles (Paris, Berlin or Dublin), on the one hand, and the rest of the continent, on the other hand. Does coworking only fit with dense urban environments? 

Defining the differences in flexible working is critical, as coworking only makes up a small percentage of the market. Flexible workspaces offer all types of space including dedicated private offices, hybrid space and coworking. The growth of flexible workspaces and coworking will continue as companies of all sizes adapt and demand greater agility and flexibility with reduced risk. In terms of specific location growth, there are some factors which could make other European city contenders against London; largely whether Brexit will mean businesses no longer want to retain their portfolios in the UK.  Some businesses may seek a flexible solution in a key European city, with Dublin already being the European headquarters for some of the largest tech companies such as Google, Facebook and Paypal. Whilst markets such as Paris and Amsterdam continue to go from strength to strength seeing consistent growth, attracting a range of companies into the flex market as well as seeing an increased range of operators in these cities. Whilst London continues to be the most mature European market, other key cities are beginning to really tap into flex space with an abundance of new centres and operators launching in the market.

Defining the differences in flexible working is critical, as coworking only makes up a small percentage of the market.

Is the move supported mainly by coworking “multinationals” or by independent local operators?

The three largest providers of serviced office space in London in 2017 only made up 17% of the total market with a huge number of niche providers. These smaller operators cater for unique but growing segments of the market such as specialist TMT space or women-only centres.  As we have seen in the US, the number of smaller operators, who run only one or two centres, has continued to proliferate despite the growth of the larger players and represent a large proportion of supply to the market.

The three largest providers of serviced office space in London in 2017 only made up 17% of the total market with a huge number of niche providers.

Are traditional business centers all getting in and supporting the growth in offering?

Whilst the initial response was sceptical, many traditional landlords are beginning to see the benefits of flex space within their workspace. According to the Financial Times, increased client demand for flex space is having a significant impact on UK landlords.  As business demand for greater agility grows and the size number of requirements increases to all-time highs, in fact the number of deals done across London for 20+ desk requirements is up a staggering 46% in the last year alone.

Traditional landlords are seeking a new route to cater for this demand; Instant recently complete a first of its kind with a co-lease solution with landlord, Dorrington, for a client seeking a larger desk requirement.

The number of deals done across London for 20+ desk requirements is up a staggering 46% in the last year alone.

How does pricing and amenity provision compare, and what do you expect to be the respective USP’s (Unique Selling Proposition) ?

Service, Calibre of space, Quality of physical space, Additional amenities, Gyms on site, Community aspect and network (WeWork, The Wing, etc.).   Much like many other models; the higher the calibre of the amenities, the higher the pricing. However, desk rates are continuously climbing in correlation with increased demand.  We have commissioned a number of surveys over the last 24 months with our vast occupier database. They are seeking workspaces with amenities more akin to a hotel environment with gyms, creches’ and yoga spaces to name just a few – and operators are listening. 

They [occupiers] are seeking workspaces with amenities more akin to a hotel environment with gyms, creches’ and yoga spaces to name just a few – and operators are listening.

What are, according to you, the other growth areas – and the reasons why we think they are going to expand ?

Events, meeting rooms, gyms etc, concessions (pop ups, etc)… Operators are beginning to diversify and add value to existing clients; for example WeWork has begun providing pop-ups for retailers within their locations, providing a one-stop shop for occupiers.  Other ventures include single use meeting rooms. Within the wider market, adding value with improved or innovative amenities will help operators stand out from the crowd. 

What could slow or stop the expansion dynamic ?

There are several key trends that will significantly shape the future of what is still a nascent industry. The flex market is only 30 years old, at most, but the majority of its growth has come in the past decade with supply ramping up and more operators joining the market. This rapid growth and increasing interest in flexible solutions from the more traditional side of the property sector is already creating issues that the market will have to address. As competition grows across the market and is compounded by increased cost to operators of taking space, square meters allocation per desk has fallen dramatically to ensure margins are retained. We have also witnessed consolidation of the market through a number of acquisitions. In APAC, WeWork has been acquiring a number of local operators including Naked Hub and Space Mob. There are over 5.000 centres across EMEA and we have witnessed growth of 15% in the last 12 months. A number of operators including Mindspace and WeWork have expanded their footprint in Paris, Berlin, Amsterdam, and Tel Aviv.  While there is growing demand in all markets for flex space, there are a few factors which could impact the growth of the flex market : 1) Saturation of the market with too many; 2) operators, Recession / Financial down-turn; 3) Consolidation of the market.

As competition grows across the market and is compounded by increased cost to operators of taking space, square meters allocation per desk has fallen dramatically to ensure margins are retained.

John Williams will be a speaker at the upcoming Coworking Europe 2018 conference. 

Picture : The Space – Source : Instant Offices

A big yet untapped potential for coworking in small towns and rural areas (survey)

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Coworking is not a ‘city only’ phenomenon. Since a while, singles, young couples and families are moving away from the noisy pace and high costs of metropoles to settle within remote areas, looking for wellbeing and affordable cost of the countryside.

If Coworking in small towns and rural areas isn’t new, it keeps nowadays growing, as the last Coworking Europe conference’s editions confirmed. 

Therefore, it made sense to more specifically survey this segment of the coworking market in order to understand the coworking realities experienced outside main urban centers.

1/The Survey sample

Spaces from all over Europe and the world took part in the survey.  Within the final sample, France, Germany, Austria and Spain are the most represented countries.

Most of the surveyed spaces (62%) are located in towns with a population 50.000 to 150.000 inhabitants big. About 20% of the survey spaces are located in towns with less than 10.000 inhabitants and a 4% in the pure countryside.

The respondents operate rather small coworking space in size, between 100 and 200 m2 on average. Only 17% operate surfaces larger than 501 m2.

A majority of the spaces have been in operation for more than 3 years. One third of the spaces represented in the sample are 4 years old or more.

2/ Competition is still low

The lack of awareness about the existence of the “Coworking” concept is mentioned as one of the biggest challenges coworking spaces struggle with in small town and rural areas.

The positive flip side of the situation, is that they face few or no competition in their immediate surrounding.

A big deal of the respondents in rural areas provides with traditional coworking services : meeting rooms, hot-desking in an open space, fixed desk in an open space and event venue.

Mokrin House (Serbia) is an example of a very successful coworking project located in the countryside.

Product such as ‘content production’, ‘private offices’, or ‘sponsorship’,  are offered to a lower extend in rural area located coworking space.

More than 80% of the surveyed spaces operate without any public subsidies.

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3/ Rural “satellite offices” aren’t hot yet

The biggest part of the surveyed coworking community members live within a range of  5 to 20 km from their space.

According to the respondents, the first motivation of members to join the space is : “looking for a business minded work environment“. They “look for a place where they can discuss with other peers and find new opportunities” in second place. The third motivation is : “we like the atmosphere of the space“.

The coworking communities are mainly composed out of freelancers, SME’s, employees and startups.

The coworking space is barely used as a satellite office of corporate employees aiming to avoid to commute to their company’s HQ.

4/An untapped potential 

The main takeaway from the survey is likely that coworking in small town and rural area still offers a big untapped potential.

A big deal of the faced challenges are related to market education.

The coworking market outside big cities still is in a fairly young stage of maturation. There is room for growth, as the average surface and the level of local competition appear pretty low.

Moreover, so far, the opportunity for larger organizations to use small town located coworking spaces as satellite offices is widely unnoticed.

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Reminder

Coworking spaces play a key role revitalizing small towns and rural areas bringing the talent back. A good example is The Ludgate Hub located on the Southern coast of Ireland, in one of the most rural and remote areas of the country. After two years, the main results of the Ludgate Hub include the formulation of a digital strategy for a rural town, the creation of new jobs for the area, introduction of new families into the area, a boost of expenditure in the building, and services.

See the interview here.

Paris coworking boom equally fuelled by independent and branded spaces

The maturation of the coworking market showcases a more and more perceivable split between two kind of players :

  1. well funded growing coworking brands, with a multi-location strategy, on the one hand
  2. locally rooted independent coworking spaces with a more focused identity and community, on the other hand.

The pattern gets confirmed is a steadily growing number of metropoles around the globe London, Berlin, NYC, Chicago, Singapore, Sydney, Shanghai and many more.

Paris is no exception.

The international real estate advisory company Arthur Loyd just published a data supported study on the rise of the coworking industry in the Paris region.

As much as 10 football fields to open in 2017

According to the study, close to 70.000 m2 of coworking space are to open in 2017. “It’s as much as the total coworking openings we have seen in the Paris ragion in 5 years“, underlines the firm.

Whitin the last 24 months, the coworking offering increaseded by 167%.

The number of coworking spaces ninefolded, from 20 spaces in 2012 to a total of 177 in 2017 !

“Nowadays, a mere 7% of the digital natives’ population (18 to 30 years old) consider to work from a traditional office”, observes the Arthur Loyd study.

Growth equally supported by branded and independent coworking spaces

Who drives the market up ?

According to the study, the parisian market is evenly divided in terms of the number of spaces between the independent and the branded coworking spaces (WeWork, Spaces, etc.).

Independent coworking spaces in Paris started to ignite the demand seven years ago.

Arthur Loyd mentions Solleiles Cowork, Mutinerie, La Cantine (now Numa), La Ruche, La Cordée, Lawomatic  and many more, including bigger independent networks such as Remix Coworking.

The rise of branded networks of coworking spaces is more recent in Paris, as it is in other major cities in Europe, Asia or America.

Remix Coworking

International brands like WeWork or Spaces (Regus group) opened their first locations only this year in the French capital.

Meanwhile, well-known French companies and investors have invested in the building of local coworking brands, now expanding in Paris and in other major cities in France (Lyon, Marseille, Bordeaux, Lille…). Those are Nextdoor, Kwerk, NOW and some others.

Branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.

According to the Arthur Loyd study, the main difference between the independent and branded coworking spaces lies in the average surface of the respective coworking spaces : within the Paris region, the average size of independent coworking spaces is 364 m2 as opposed to 1.061 m2 for the branded coworking spaces.

In other words, branded coworking spaces represent nowadays almost 75% of the overall coworking market in the Paris-Ile de France region, due to their multi-locations strategy.

More independent spaces located in the city’s off-centre areas

A difference surfaces as well in terms of geographical location. Whereas branded coworking spaces tend to open in the very center of the city, close to the most prestigious addresses, on the main avenues, a.o., independent coworking spaces are, on average, more often located in the off-centre districts.   

Lease costs obviously play a role.

It means that the price of a desk for members is slightly lower within independent coworking spaces (401 € /month, on average) as opposed to the branded space with multi-location (493 € / month for WeWork), writes the report.

Some spaces also position themselves within or close to the digital entrepreneurship hotspots or in Paris’s trendiest neighborhoods, not far from Bastille, Le Sentier or République“, comments the report.

A real impact on the real estate market in Paris

Coworking will only absorb about 3% of the total transactions made in 2017, according to Arthur Loyd Investement. The market is generating a lot of new value, though. Landlord should take it seriously into consideration.

For different reasons, as observe in other countries, corporations now are becoming users of coworking spaces.

Expect more growth to come in Paris.

The breakdown between Branded coworking spaces networks and independent coworking players will be a hot topic to be addressed during the upcoming Coworking Europe 2017 conference, to take place in Dublin (November 8-10). 

How to bring balance between Automation and Human interaction in a coworking space ?

As human-centric workspaces are rise, so are workplace management tools.

Nexudus Spaces co-founder, Carlos Almansa has recognized the need for optimizing everyday tasks in the workplace.  

Technology as a compliment, not a replacement

Some might be sceptical of running operations digitally, out of fear that it might take away from the human experience. But that just depends how we look at it. Technology can help, but not without a strong management team at the core of the coworking space. Tools such as Slack, Facebook groups or  WhatsApp are not enough.

“Indeed, these tools, including our Nexudus platform, help people communicate with one another, says Carlos, but ultimately if the management team doesn’t work on a day-to-day basis to bring people to these tools and encourage them to post content, it won’t work”

Better understanding member needs through automation

Take an example of a good synchronization between automation and human interaction : check-ins.

Automatic check-in technology can help you better understand your member’s needs. “It  provides operators with a considerable number of detailed reports on how you space is used, so they can discover useful information, i.e. the most active members, peak hours in the space, busiest day of the week, etc”, says Carlos.

Kisi Access Control for coworking spaces

Kisi Access Control for coworking spaces

That way, you can monitor when the space is most used.

Knowing who is coming and going can create a sense of ease for space managers, which plays into how operators choose to secure their coworking space.

If space operators choose to automate physical access to the space, they also can do so by implementing “access control systems, such as Kisi or DoorFlow”.

Such tools allow both operators and members to enhance their coworking needs, by tracking hours of operation and providing flexible use of the space, adds Carlos Almansa. As a result, the human driven operation will just come out better. 

Community Building : again, online AND in person

While it would be nice to offer a personalized experience to each and every member each day, the tasks pile up, and most likely members will be more disappointed rather than satisfied with the results.

Remember, you can’t please all of the people all of the time.

Take the booking process :  “Allowing your space members to book resources and rooms online makes day-to-day space management a lot simpler.”  

That way, you can focus on building better relationships with your members, rather than waste time with manual low adding value tasks.

And tomorrow will be taken over by A.I. ?

Having an active blog running for your coworking community also plays an important role in shared workspaces. As coworking evolves, the community aspect has gone beyond the walls of the coworking space and has become an all encompassing world.

We are not there, yet, but let’s think about A.I, in a not to distant future, which may be the running mate for atomizing the workplace.

Sure, but at the moment, it hasn’t quite got the human touch so vitally needed for human-based communication. co-working blog

However, when it comes to the future, we know that we haven’t even seen the beginning of the level of advancement from technology. For Carlos, the interaction between community members and coworking spaces is going to escalate in coming years. “The technology behind these spaces  should be there to foster such change, such as providing tools that encourage people to work together”.

 

Global Coworking Survey 2017

The Deskmag Global Coworking Survey 2017  is out. Survey

The first results where presented at Coworking Europe 2016 (Brussels, Nov 28-30).

Download the worldwide data and statistics here below.

As of today, there is close to 1 million coworkers worldwide.

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carsten

Coworking India Survey and Data 2016

As a global movement, Coworking has taken roots in India the last years.coworkin-co

A couple of hundreds of coworking spaces are now in operation in India.

Mentioning coworking space means we don’t take into account, here, basic shared spaces environments without services and (semi-)open access. Well workspaces associated with an identity and a community, mainly dedicated to digital workers of any kinds.

About one third took part in the Coworking India Survey 2016 produced by SocialWorkplaces.com prior to the Coworking India conference, on September 9-10th, 2016. Here are some key data disclosed during the event which gathered close to 120 coworking operators and pundits from the whole country.

Bigger on average in size, though still limited in number

So far, there is less coworking spaces in India than coworking spaces operating in the London area alone.size-space-cwindia

That said, though, on average, coworking spaces operating in India seemed wider in space than the average noticed in Europe, for instance. More than one third of the interviewed coworking spaces manage a facility more than 1.000 m2 wide.

Likewise, the average size of coworking tenants each coworking deals with seems to be wider than the average observed in Europe, although the number of operating coworking spaces is much higher over there.  According to the data, one third of the surveyed coworking spaces caters between 100 and 200 members at least.

cw-india-members

Acceleration and startup programs often provided

India wants to put itself as a startup nation.

No surprise that a big deal of the coworking spaces who replied to the survey are targeting startups and digital entrepreneurs. So, it is not amazing that more than 50% of the interviewed spaces described not only themselves as coworking spaces but also as Incubation/Acceleration program providers or sometimes TechHubs.

vineelContentwise, the community building activity is definitily as critical for the Indian coworking scene as it is elsewhere, show the data collected for the Survey. More than 2/3 of the Indian coworking spaces organize in house events at least once a week.

The Coworking industry in India seems for sure ready to take off confirmed attendees at the first Coworking India conference.

Download more facts & data from the Coworking India 2016 Survey providing your information here below.

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