GPT expands co-working hubs as WeWork builds steamAt home in the hub: GPT's co-working facility Space & Co at Melbourne Central. Photo: Supplied

GPT expands co-working hubs as WeWork builds steam

GPT Group is expanding its co-working facilities in Melbourne as the emerging workplace model gains traction in the local office sector led by US giant WeWork.

Under its flexible workplace business, Space&Co, GPT is opening a third facility at 8 Exhibition Street, which is half-owned by its wholesale office fund.

The new hub, due to open in the first half of 2018, will occupy the entirety of level 22, previously occupied by consultancy EY, which remains in the building.

The 1568 square metre space will be able to accommodate up to 200 new members.

Space&Co is also expanding its 530 Collins Street facility for a second time since it opened in early 2016, with room for another 40 members.

The first co-working facility that GPT opened in Melbourne, at its Melbourne Central tower gained a whole floor last year and GPT is looking for further opportunities to expand its hubs business.

Increased demand

“There’s certainly an increase in demand,” GPT’s head of flexible workspace solutions Daniel Stiffe, told The Australian Financial Review.

“That’s largely been led by the adoption of flexible workspace by bigger corporates. The take-up by established business has increased significantly.”

Major landlords, including GPT and Dexus, with its Dexus Place model, have moved quickly to establish a foothold in the flexible workplace sector.

The sector is expanding rapidly, with independent operators growing beyond the initial user market of independent workers and start-ups into the corporate sector.

About half the users in GPT’s hubs are their existing tenants, while the remaining users are smaller businesses and corporate players needing a local office, such as international firms.

“Although there has been a significant increase in competition, what the likes of WeWork has done is increase the awareness of what co-working is, which has in turn fed the adoption by big corporates for taking up this kind of space,” Mr Stiffe said.

“It’s increased demand. WeWork has opened in Sydney and Melbourne and our occupancy has not been impacted by them opening. Our offering is differentiated from WeWork.”

In the past four years, the sector has grown almost 300 per cent, admittedly from a low base, spreading into 309 facilities and occupying almost 195,000sq m, on Knight Frank estimates.

Large operators, including local player Hub Australia and US behemoth WeWork are now attracting patronage from mainstream corporate tenants, who are looking for flexible space.

WeWork, with three locations in Sydney, opened its first facility in Melbourne overlooking the Bourke Street mall late last year and plans to open a larger hub occupying an entire Collins Street building later this year.

Another new operator, CreativeCubes.co, recently opened a facility in Cremorne on the city fringe and plans to roll out six hubs in the next 18 months.

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