Is Coworking Space Taking Over Commercial Real Estate
There is no denying that coworking spaces have taken over the globe and are changing how we work. From the infamous traditional 9-to-5’s to being completely flexible, with workouts, yoga, and a little bit of fun in between. One of the elements that accelerated this growth is obviously the COVID-19 pandemic. The majority of today’s employees now want to work hybrid. In response, some employers have already made changes eg a workplace management system installation for hybrid roster planning.
With the rapid change of work setups, we have seen huge demand for coworking spaces for both big and small businesses. According to Statistica, there are about 19,000 coworking spaces worldwide, and that number will reach 26,000 by the year 2025.
Speculations about downsizing traditional office spaces have also attracted attention, with quite a number of big enterprises, and even startups, have started to trim down office size.
Interesting question: how do the once insignificant coworking spaces for freelancers is now affecting global real estate?
Global Hire and demographic change
The primary driver of this change is attributed to technological advancement that allows hiring from all over the world. When it is all online and employees can work anywhere they want, it give rise to the need of a professional work space near home. As a result we see booming construction for new coworking spaces in residential areas.
It is also significant to note that millennials are taking the lead in this remote or hybrid work setup. Millennials and Gen Z, the ‘tech gen’, are expected to dominate the global workforce in the next decade — it will further drive the need for workdesk that gives flexibility .
In addition, “Digital Nomads” are pretty popular in this game. Coworking space is a top choice given the varieties of atmosphere and amenities users can pick from. According to a JLL study in 2021, the types of workers we have today have four categories: the traditional, experienced lover, wellness addict, and lastly, the free spirit. The flowing nomads can easily hop on a workplace they desire whenever traditional office doesn’t fit.
Time and time again, we have witnessed how fast our situation changes. All statistics point to a more flexible work future and work-life balance, with employees being picky about their options. Time has come when employees have a upper hand and are more willing to get heard.
Coworking space impact on real estate
These third spaces are the Airbnb of commercial property. They are snitching a big share in value across Europe, North America, and Asia. Since investors see its profitability arise in the new normal, the weight of coworking spaces in commercial real estate portfolio is only becoming stronger.
Coworking spaces produce a attractive income where operators make a profit by offering short-term, flexible leasing options. At the same time companies can take advantage on the flexibility given and achieve savings in reduced fixed lease. As there is strong incentive to gain more users, coworking operators often make heavy investment in technological upgrades, HVAC enhancement with some even provide wellbeing classes for member eg yoga and meditation class.
The popularity of coworking spaces sounds almost invincible. According to Colliers International, coworking spaces now account for 3.7 million square feet (sq ft) of Singapore’s commercial area, up from 1.2 million sq ft in 2015, with over 18,700 coworking spaces globally.
What will it be in the future?
More space redevelopment
With commercial real estate showing no sign of slowing down and with a growing demand for coworking space from the advent of freelancing, startups, and hybrids, more real estate developers and coworking operators are extending their ventures to secondary and tertiary markets in anticipation of persistent market needs.
Among these spaces, developments are the creative office trends that are popular with millennials.
Smart technology in place
Having the smartest and latest technology in place will attract a larger audience. Modernization will not only take over how we do work, but also where we work. That is why many coworking operators install cutting-edge technologies to parallel this advancement.
An easier process
Contract with coworking spaces are easier to manage than traditional offices. In fact, you can even lease for only two to three hours, depending on your needs. With Deskimo’s pricing model, you only pay for the time you work, down to the minute.
We live in a disruptive society, and just as Airbnb and Uber impacted our daily lives, coworking has the potential to reshape our work lives. If the pandemic has taught us any lesson, it will be the value of flexibility and purpose given in our job position.
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Deskimo is the flexible work platform of choice that helps businesses navigate the new future of work. With us, you and your business can adapt to flexible work, and pay-as-you-go across dozens of spaces in Singapore, Indonesia, and Hong Kong.