While coworking has traditionally been targeted at freelancers and startups, 2018 was the year where corporate groups began taking up flexible workspace. This trend will only grow this year, Colliers International’s Director of Tenant Advisory Rowan Humphreys said, which will in turn affect the type of product on offer.
“We forecast a continued increase in take-up of flexible workspace by multinational corporations, be it for short or longer term occupation. We are also seeing an increase in the size of suites being leased with some examples of 50-100+ desk suites,” he told sidespace.com.au.
Mr Humphreys pointed out that landlords are “one of the biggest threats and opportunities” for coworking operators.
“We forecast that more landlords would look to partner with operators, either on a building-by-building basis or at a strategic investment level, this is beginning to happen and we believe we are at the very tip of the iceberg on this trend,” he said.
“Key partnership deals in 2018 included Frasers Property investing in [Singapore’s] JustCo and CapitaLand’s acquisition of a 50-per-cent stake in [Hong Kong’s] The Work Project.
Further consolidation in the market is also expected, with larger operators purchasing smaller operators to gain market share, according to Mr Humphreys.
Not only are landlords investing in coworking companies, some are also seeking to start their own flexible workspace brands.
Examples include Charter Hall’s Flexispace, Dexus’ Suite X and Flex by ISPT. The property group has also expanded their shared conference and event space brand Dialogue into Sydney’s George Place at 345 George Street.
“Major landlords are looking at the sector more closely than ever before and deciding on whether to self-perform flexible workspace and amenity spaces, acquire an operator, invest in or partner with an operator,” Mr Humphreys said.
“This should lead to more creative deal structures, bringing about greater holistic offerings where occupiers will benefit, as real estate is ultimately about the occupier need; meeting their evolving demands is the key to success.”
Mr Humphreys believes that landlords considering establishing their own coworking spaces should should look beyond the office itself.
“Placemaking and amenitisation will play big roles in the sector over 2019,” he said, adding that the number of food-and-beverage and wellness facilities offered by coworking operators will increase.
Major foreign groups are also tipped to arrive on Australian shores this year, including Singapore’s JustCo and Hong Kong’s Campfire.
“These groups are expanding throughout Asia not just Australia,” Mr Humphreys said.
“Australia is viewed as a more mature office market, compared with many other markets in Asia, and certainly major cities like Sydney and Melbourne would be considered as important international business cities, therefore I suspect it is about getting flags on the map.”
JLL’s Australian Head of Office Leasing Tim O’Connor said flexible workspace companies of all sizes and forms have grown over the past year.
“We have seen the expansion of multinational, domestic and niche coworking operators,” he said.
“These groups are having a significant impact on office leasing markets.”
Mr O’Connor anticipates that there will be a new breed of coworking players with a different strategy from the major operators.
“In 2019, we expect to see new entrants into the sector and an increase in the number of niche operators targeting a specific demographic of the workforce or industry cohorts.”
Cover Photo: As enterprise-level users of coworking grow, suites with more than 100 desks have been leased. (Photo: Tech in Asia)