- Coworking is the new normal and it has revolutionized the way people use and lease office space.
- The flexible workspace industry has had a great impact in the larger commercial real estate industry.
- Recent statistics show the growing effect of coworking in real estate and its growth opportunity in the coming years.
There’s no doubt that coworking has revolutionized the way people use and lease office space. Corporate coworking has taken off in the past several months, property groups and owners are now looking to delve into the industry, flexible workspace brands keep on growing, and investment continues to pour into the industry.
We already know coworking is the new normal, but beyond that, the industry is having a great impact on the larger commercial and office real estate industry.
Over the past 6 months a plethora of research reports have come out, and all have presented findings that indicate the incredible potential of coworking and flexible workspaces, both today and in the future. So much in fact that even one report found that coworking can potentially withstand an economic downturn.
This year (2018) has proven that it’s a great time to be involved in the industry and signs point to even better times.
New Coworking and Flexible Workspace Stats
- Flexible workspace will represent between 5% and 10% of office inventory in various markets.
- 3 million square feet of flexible workspace were added in the first half of 2018.
- There are at least 20 markets that have over 500,000 square feet of coworking spaces.
- 11% of all coworking locations globally are joint ventures between a coworking operator and a landlord.
- Building owners are now comfortable to allocate between 15% to 30% of a property to coworking.
- Flexible space providers accounted for 4.4% of square footage leased in major deals in H1 2018.
- WeWork is now the largest office space occupier in London and New York City.
- Coworking spaces accounted for nearly 10% of leasing volume in New York in the first half of 2018.
- The amount of coworking space in Manhattan will likely approach 8.0 million square feet or
- roughly 2% of existing office stock by the end of 2018.
- The amount of coworking space in Chicago’s CBD has risen to 2.6 million square feet, equivalent to a 250% increase over the past four years.
- A growing number of workspaces experience occupancy rates above 90%.
- Coworking space in retail properties will grow at a rate of 25.0 percent annually through 2023 and reach approximately 3.4 million square feet.
- The number of flexible office centres in the UK tracked by Instant rose to 5,320 over the past 12 months.
- There are now more than 2,800 companies in the UK that have flexible office space as part of their portfolio.
- The flexible workspace industry is the strongest subsector in London’s M25 region, accounting for 15% of total office take-up.
- The flexible workspace market in London grew 25% in the two years.
- Between 25% and 30% of flexible space in London is occupied by large companies and corporates.
- China, Singapore, and India have experienced industry growth of over 15%.
- There are over 5,000 flexible workspace locations across EMEA.
- The flexible workspace market stock in Asia managed by major flexible space operators grew 150% from 2014 to 2017.
- The flexible workspace industry in Singapore is expected to grow by 30% in total stock.
- There was a 105% rise in larger businesses looking for flexible office space in Australia from 2017 to 2018.
These stats prove that coworking has disrupted and revolutionized the office real estate market. The flexible workspace industry is pushing the boundaries of CRE, establishing itself in urban and suburban areas, in Grade A buildings and in retail space. What these numbers show us is that coworking works and it will continue to work in the years to come.
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Stats taken from the following reports
Cushman & Wakefield — Coworking and Flexible Office Space: Additive or Disruptive to the Office Market
JLL — Can coworking work at the mall?, Spotting the opportunities: flexible space in Asia Pacific
CBRE — U.S. MarketFlash | Flexing Their Muscles: Flexible Space Provider Leasing Surging
Match Office — 2018 Survey Report
The Instant Group — UK Market Summary: The evolution of flexible workspace
Knight Frank M25 Offices Investment, Development & Occupational Markets Q2 2018
Colliers International — U.S. Research Report, Top Office Metros Snapshot Q2, 2018
Office Hub — The Australian Coworking Market Report 2017/2018
Savills – New York City office sector Q2 2018