Co-working spaces gain traction in the market
Flexible workspace is increasingly enabling staff to work where and when they want – while also reducing rent costs for businesses.
Office tenants are leasing up to 10 per cent less space by moving to flexible workplaces for activitybased working and to share space.
CBRE head of research Zoltan Moricz said the rise in ‘‘agile’’ working was having ‘‘profound implications’’ for the way office space was used, and it was affecting the market.
‘‘It’s no secret that the days of having your own desk or work station are becoming less common, as organisations look to more efficient use of space,’’ Moricz said..
‘‘Unassigned seating is being implemented more widely, with more spaces being tailored towards a specific task, such as creative brainstorming.
‘‘What is interesting to see now is two main structural changes in the broader market that can be related to a change in space use by office occupiers.
‘‘The first is that demand among occupiers for high-quality new space is strong … [and] the second change is that a disconnect has emerged between employment and office space absorption.’’
During the 2000s, absorption growth exceeded employment growth, Moricz said.
However, since 2014 net absorption had increased less than employment, as companies started leasing less space per employee, he said.
This led to increased demand for higher-quality workplaces.
Dean Croucher, of independent property advisory firm TwentyTwo, said the types of businesses using co-working spaces was changing.
For the past 10 years, the space had been generally used by ‘‘under-capitalised entrepreneurs or not-for-profit initiatives’’, he said.
‘‘As a result, the facilities have sometimes lacked the level of investment needed to compete with a business leasing traditional office space.
‘‘Consequently, the property market has generally viewed these offerings as ‘boutique’ and suited to small businesses or start-ups, and not any real threat to the traditional property investment market, developing and leasing commercial office space.’’
That is, until now.
The latest ‘‘real estate revolution’’ in New Zealand gained ‘‘credibility and horsepower’’ last year, when Precinct Properties bought 50 per cent of Generator, a business which offers co-working spaces in Auckland, he said.
Croucher believed other big players would follow suit, as the trend of shared spaces continued to grow.