The shift from traditional office spaces to co-working environments is disrupting the office sector market across the globe. In 2016 alone, co-working operators in Asia Pacific leased about five million square feet (msf) of office space. Today, companies providing shared workspaces are thriving and demand for this trend is increasing, according to a Cushman & Wakefield and CoreNet Global report on co-working.
It has been well-documented that benefits of shared workspaces include opportunities for users to collaborate, socialize and network. But what does the future hold for co-working? Will the seemingly insatiable demand for co-working space continue to grow? As increasing investment sums are ploughed into the sector, we take a look at some of the reasons the market looks set to remain buoyant in Asia Pacific, and at what the critics have to say.
Office Space Cost
One of the main drivers of the co-working trend is the rising cost of real estate. As Cushman & Wakefield’s Office Space Across the World report reveals, workstation costs in Asia Pacific rose 3.4% in 2017, to an average cost of US$5,900 per year. Hong Kong’s average workstation cost of US$27,432 was the most expensive in the world and two other APAC cities (Tokyo and Sydney) made it into the global top ten.
Against this backdrop, co-working spaces can offer savings of between 10 and 30% compared to traditional office environments. Unsurprisingly, companies looking to control their real estate spend are increasingly integrating co-working solutions into their corporate real estate strategy.
Traditional office leases are typically signed for between five and 10 years. In a co-working environment, leases can be as short as one month, allowing occupiers the flexibility to take on more or less space to suit their business. Co-working operators provide the flexible leasing options needed to accommodate this.
However while both cost reduction and increased flexibility are likely to remain priorities for companies – and hence good news for co-working operators – critics are quick to point to the “fad factor” associated with co-working and the shortfalls it has compared to more traditional offices:
Security is one of the main concerns of many companies looking to adopt co-working. With many co-working offices designed as open space environments, security and privacy can be easily compromised, particularly when those who share the space work for different companies or at cross-purposes. Confidential information can be seen on computer screens and verbal exchanges may be heard by potential competitors. Shared networks too, contribute to a belief that co-working spaces do not offer as secure an environment as traditional work settings.
Working in a shared space is not for everyone. Some people prefer a quiet space when working and some tasks need to be completed in silence. Distractions in a co-working environment may result in reduction in productivity. While many co-working spaces also offer “quiet spaces” alongside the shared, critics again would point to the advantages offered by traditional office settings.