The growth in the shared workspace sector in the two cities has been “absolutely astronomical”, according to Alex Billing, Australia and New Zealand Regional Vice President of Next Story Group, which is gearing to make its first foray into Australia’s coworking market through the group’s Kafnu brand on March 1.
“It's going to be an interesting time for coworking; in the past there has probably been a growth strategy of (doing it) as quickly as possible, and operators just trying to get into market,” Mr Billing told sidespace.com.au.
“We believe that our approach moving forward is we're going to be taking a far more considered view on our growth strategy.”
He added that the next 12 to 18 months will be a “strong learning curve” for many operators, as an increasing number of coworking spaces open and the marketplace becomes more competitive.
“There's no doubt that these offerings can still really provide something unique to buildings that investors own and there's an appetite for owners now to get into this space, so there's certainly no shortage of opportunities for us to expand our brand, but we are being, to be honest, considered and careful about that,” Mr Billing said.
“In Australia, this flexible workspace has been maturing, but we still see a significant hole in the market to offer a hospitality-based flexible offering that offers more than just a standard desk and office.
“Offerings like Kafnu, where we're looking at coming into a niche part of the market and offering something different from our competitors, you're going to see more and more of that.”
More innovation is also anticipated for the sector, with more services tipped to break away from the traditional month-on-month hot desk-style memberships.
The 3000 sqm Kafnu centre, which will be located in inner Sydney suburb Alexandria, will provide flexible workspaces and accommodation on the same site - the first to do this in Australia.
The centre features amenities such as the 16 hotel rooms, a gin bar, a virtual fitness studio and GoGet car membership.
Work-related facilities include private office suites, shared workspace areas, meeting rooms and purpose-built media production and podcast studios.
“What we're doing now is trying to bring something different into this marketplace and I don't think we'll be the last, but we’re certainly bringing something into the Sydney market that it doesn't have at the moment,” Mr Billing said.
Next Story operates Kafnu as a hub-and-spoke model, with the Alexandria location acting as a larger “hub”, meaning a smaller “spoke” centre could be on the way in Sydney.
“Where we have larger spaces like Kafnu Alexandria, sort of 3000 sqm-plus, we are always looking for opportunities to grow and have smaller spokes operating in different parts of the city to support that membership,” Mr Billing said.
“(The Alexandria opening) enables us to hopefully bring some smaller satellites into places like Sydney CBD or indeed fringe locations; we're seeing a lot of success for smaller locations outside of the CBD in some of these commuter hubs.”
And Sydney is not the only Australian market Next Story is eyeing, with a centre in either the Melbourne CBD or fringe suburbs also on the cards.
“We are looking at spaces in CBD, we have a lot of exciting development happening in Melbourne,” Mr Billing said, citing the group’s Sage Hotel in Ringwood and the 255-room NEXT Hotel on the CBD’s Collins Street, which is under construction.
“We have that base market which hopefully enables us to bring Kafnu in with some services already in place.”
Apart from Sydney, the international Kafnu network currently has properties in Bengaluru, Taipei and Hong Kong. Three more Kafnu properties will debut in Ho Chi Minh City in Vietnam, Colombo in Sri Lanka as well as Melbourne.
Cover Photo: The 3000 sqm Kafnu Alexandria is set to open its doors on March 1. (Photo: Kafnu)