Working cheek-by-jowl at desks with strangers in large open-plan spaces is falling out of fashion largely as a result of COVID-19’s social distancing, and instead hiring flexible office space with workmates has emerged as all the rage.
And this second wave in the coworking swell shows all the signs of proving even bigger than the first.
“There’s now a lot more interest in taking dedicated and secure private offices – for one person up to 100 people – and that’s the big shift in the flexible office space industry,” said Jim Groves, co-founder and chief executive of coworking platform Rubberdesk.
“When people are starting out, they might want one desk, but established businesses like to go with private dedicated office spaces.”
In addition, the pandemic is showing companies what’s actually possible, and that all employees don’t have to work from the head office to be effective and efficient. The technology’s been quickly refined to help staff working remotely.
“But it’s not just a choice for working from home or from head office,” said Mr Groves, who currently has 3000 offices listed with 142,000 square metres of office space around Australia and room for 21,000 people. “There’s the opportunity for a third space, flexible space.
“As a result, businesses are re-examining their real estate strategy and can take the approach of downsizing, and having people either in their HQ or in a remote hub close to their homes, say in the inner west or northern beaches, rather than having them commute for hours.”
That’s an optimism around the industry echoed by Brad Krauskopf, founder and chief executive of Hub Australia. He believes the coronavirus crisis showed people in a very quick period of time that they didn’t have to go into a company’s head office to work.
It took only a little longer, however, for them to realise that perhaps working from home wasn’t the casual, easy idyll they’d always imagined.
“As a result, we’re going to see a real move to remote working which is going to enable all businesses to look at their workspace requirements,” said Mr Krauskopf, whose company has more than 3000 members from 1000 businesses that use Hub Australia nationally at seven locations, shortly to expand to nine.
“They’ll always have the head office or ‘core’ space on traditional leases but then they’ll have a combination of flexible workspace and working from home. Flexible workspace is thus going to be the biggest beneficiary of everything that’s happened, and it’s shown both employers and workers that workspaces should be about the people who use them, rather than about the businesses’ spaces themselves. We are part of the solution.”
Post-COVID-19, there simply won’t be as many companies eager to commit to formal long leases as uncertainty will still surround the economy for some time to come. So hiring flexible spaces, run by professional operators, across multiple locations on much shorter deals could seem an enticing alternative.
Yet not all coworking operators are so cheerful.
Sami Schiavi, flexible workspace specialist at Colliers International, who has 110 sites and 90 operators across Sydney, said a lot of operators put everything on pause and were licking their wounds from the disruption of the pandemic. “But over the past week, inquiries have picked up again for flexible work space,” she said.
“A lot of people are now restricting their companies and are turning to flexible work space for their requirements as it’s flexible and short-term, and is more appealing than having to commit long-term. So it’s now looking really promising, but it’s hard to say how it will go.”
A new report from Rubberdesk, Flexible Office Space During Uncertain Times, released in May 2020, said the world was in the middle of the biggest flexible-working experiment.
Demand for short-term office space in February, before the pandemic really came home to roost, had hit an all-time high.
With the social isolation measures, however, many of the coworking desk workers took advantage of the flexible terms, put membership on hold to save money and went home to work.
“But coworking desks in open-plan office space mixed with other businesses accounts for less than 20 per cent of available office space,” said Mr Groves. “Over 80 per cent of flexible office space is in secure turnkey private offices, generally on six or 12-month agreements.
“As these contracts expire, tenants will be in a position to renegotiate terms and size of office space far sooner than those businesses in a traditional lease … As businesses emerge from the COVID-19 lockdown, with bruised balance sheets and smaller but growing teams wanting to maintain a degree of separation, it will be private turnkey offices on flexible terms that are in highest demand.”
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