While last year’s coworking atmosphere focused on major expansion and growth, 2019 is gearing up to be the year that operators may fail as the market becomes more saturated.
Coworking only takes up 2% of assets in Sydney and Melbourne and 7% in New York, but Lee Elliott, Knight Frank’s global head of occupier research, said that there are too many providers with similar models in the market, so consolidation is to be expected.
“What I see is a lot of coworking operators scaling very, very quickly, absolutely unbelievable rates of expansion, and I struggle to see how they can maintain a very high level of service,” said Elliott.
On top of this, landlords have been entering into the ring by either starting up their own coworking brands or partnering with existing operators. Many are realizing it is less about taking over a building and more about the services the building provides.
Elliott said that the shift towards more customer service, flexibility, and workplace experiences is necessary to withstand failure for all parties operating within the coworking market.
