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Jonathan Price – CRE & Flex Expert
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According to a new report published by Allied Market Research, titled, “Coworking Space Market, Business Model (Corporate /Professional Coworking Spaces., Open/ Conventional Coworking Spaces, Others), By End Users (Large Enterprises, SMEs, Freelancers), By Industry Vertical (IT And Telecom, BFSI, Media And Entertainment, Travel And Hospitality, Healthcare And Life Science, Others): Global Opportunity Analysis And Industry Forecast, 2023-2032.”
The coworking space market was valued at $9.2 billion in 2022, and is estimated to reach $34.5 billion by 2032, growing at a CAGR of 14.6% from 2023 to 2032.
Development of sustainable coworking spaces is a major trend shaping the coworking space market. Coworking spaces are implementing eco-friendly measures in the workplace to attract entrepreneurs concerned with environmental issues such as global warming. Sustainable practices adopted by the coworking space providers offer substantial benefits and are economically feasible. Moreover, coworking operators are expanding into new markets, especially in emerging economies where demand for flexible workspaces is on the rise. This global expansion allows them to reach a wider range of professionals and businesses. In addition, by recognizing the need for privacy and focused work, coworking operators are incorporating quiet spaces, phone booths, and soundproof rooms to balance the open and collaborative areas. Furthermore, coworking spaces offer cost-effective solutions for individuals and businesses. They eliminate the need to invest in office infrastructure, maintenance, and utilities, making them a more budget-friendly alternative to traditional offices.
Furthermore, major players operating in the coworking space industry have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in February 2023, coworking major, WeWork India has started a new center in Pune with 1,500 desks and 96,000 square feet area amid rise in demand for flexible office space from corporates. The new facility is located at Raheja Woods IT Tower developed by K Raheja Corp. This is an asset-light deal, and the company has leased the entire building comprising five floors in the Kalyani Nagar property, spread across a deskspace of 1,500. This is the company’s third facility in Pune. WeWork India has a portfolio of over 6.5 million square feet area across 44 locations in Delhi-NCR, Mumbai, Bengaluru, Pune, and Hyderabad. Moreover, in October 2023, Newmark Group, Inc., has announced the international expansion of its flexible office platform as part of its wider strategy to provide diversified commercial real estate services in key regions across Europe. Such strategies foster the coworking space market growth.
On the basis of end user, the large enterprises segment attained the highest coworking space market size in 2022, as coworking spaces provide large enterprises with networking opportunities. Employees can connect with professionals from various industries, creating valuable connections and potential partnerships.
Region-wise, Asia-Pacific attained the highest coworking space market share in 2022. Asia-Pacific has attracted significant investment in the coworking sector, with both, local and international providers expanding their presence. In addition, the companies operating in the region are also focuing on strategic fund raising activities. For instance, in December 2022, Awfis Space Solutions Pvt Ltd, a fully tech-enabled workspace solutions platform in India, raised $1.8 million in a Series E1 round led by existing investor Bisque Limited. All these factors will boost the growth of the coworking space market in the Asia-Pacific region.
The COVID-19 pandemic accelerated the growth of coworking spaces in the country, as traditional workspaces faced challenges during the crisis. Many enterprises moved towards coworking spaces owing to affordable prices and flexibility in working areas. Moreover, many coworking providers began offering hybrid work solutions, combining remote work support with access to coworking spaces. This approach accommodated clients who wanted a mix of home and office work. However, as lockdowns and social distancing measures were implemented to curb the spread of the virus, many coworking spaces were forced to close temporarily or experienced a sharp drop in occupancy rates. The need for physical distancing and remote work led to decline in members using coworking facilities. Furthermore, coworking providers saw a reduction in membership as businesses and individual users canceled or downsized their memberships due to the economic uncertainty and concerns about health and safety in shared workspaces. Therefore, COVID-19 had a moderate impact on the coworking space industry.
