Co-working is becoming mainstream, very fast

When this writer visited Israel earlier this year on the invitation of The Jerusalem Press Club and the Israeli Government, one of the many meetings was at a colourful co-working building managed by WeWork in Tel Aviv. The reception has a couple of wood and wool statues of sheep. They appear worn out, partly under the weight of their thick wooly coat. Those who work here look the opposite - there is free beer on tap, juices, coffee, sandwiches. All this is fun but apart from employee happiness, there are many reasons why co-working is becoming mainstream fast. The needle has already moved from start-ups to corporates when its comes to adoption.

A new report by property consultants Knight Frank says as much. The company surveyed executives at 120 global companies which collectively employ in excess of 3.5 million people worldwide to come up with its (Y)OUR SPACE report. It tells that co-working works better in today's economic environment, where business planning horizons are shorter - co-working offers the freedom to expand and contract quickly according to market conditions. Dr Lee Elliott, Global Head of Occupier Research at Knight Frank noted that the research "underlines that a decade of global economic uncertainty has reshaped how many of the world's largest companies view workspace".

While co-working operators have mushroomed across the world,  a majority of global companies still occupy office space on a traditional lease model at the moment. Two thirds of companies surveyed reported that co-working, serviced and flexible office space comprise 5 per cent or less of their current office space. Only about 7 per cent stated that flexible workspace exceeds a fifth of their overall workspace. Nonetheless, about 69 per cent of global corporates plan to increase utilisation of co-working and flexible workspace over the next three years while 44 per cent believe flexible workspace will comprise up to a fifth of all corporate workspace, the report stated.

About 55 per cent of companies identified increased flexibility as the driver of this shift to co-working; 11 per cent said that the sense of community fostered among workers was key while another 11 per cent stated that the greater speed to becoming operational was the primary reason for opting for co-working. Interestingly, about 75 per cent stated that personal productivity linked to wellbeing and happiness would increase as they shift towards a new flexible and collaborative model of occupancy.

Knight Frank India, earlier in 2018, had come up with a 'The office of the future' report, highlighting the traction co-working is witnessing in India. There are about 200 co-working players running an estimated400 shared workspaces across India today. In 2010, there were less than 30 such centres. The report mentioned that Regus is the most established and the largest shared workspace operator in India today with approximately 2 mn sq ft and 20,000 seats under operation. WeWork and CoWrks are among the newer companies.

While co-working companies accounted for about 1.8 mn sq. ft. of the 41 mn sq. ft. annual commercial office space transactions volume in 2017, the expansion plans of major players and growing demand is expected to see annual transaction numbers triple from current levels over the next three years in India.