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Coworking Space Investment

Far removed from the large scale factories of the past, today's workforce has a different expectation towards its working environment. The freedom of communication afforded by modern technology has resulted in the younger generation adopting a more flexible approach to working environments and their work/life balance.

COWORKING IS A GLOBAL MEGATREND. BY 2020 MORE THAN 65 MILLION NEW SOLOPRENEURS AND SMALL BUSINESS OWNERS ARE EXPECTED TO JOIN THIS NEW REVOLUTION AND MIND SHIFT IN WHERE AND HOW WE WORK.  (US Bureau of Labor Statistics)
 
Although the trend towards coworking space investment started in the US, the market has quickly moved to other countries including the UK, the UAE, Singapore, Hong Kong, India and China amongst others. Major players within the coworking space sector already have global footprints, offering investors the opportunity to capital in the high demand for work space in ultra prime locations such as New York, London, Dubai, Birmingham and San Francisco. Indeed, throughout the majority of developing economies, demand for these more flexible working environments have resulted in coworking office space investments becoming increasingly popular over the past 2-3 years.
 
Key to the success of the coworking space investment model has been its appeal to all sizes of company and enterprise. Whilst entreprenuers and smaller businesses have been attracted by the lower capital outlays, access to supplementary services and increased flexibility, larger corporations have also seen benefits such as increased productivity. Indeed Lloyds Bank recently announced that 30% of their 18,000 strong workforce have the ability to work flexibly - allowing the bank to significantly reduce its fixed overheads.

Contact Us About Coworking Space Investments

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What Are Coworking Spaces?

Coworking Space Investment

One of the fastest growing areas of the real estate sector, coworking spaces are designed to cater for the growing demand of individuals and smaller companies seeking high quality office accommodation in ultra prime locations. No longer considered a niche sector, coworking spaces are now catering for a growing number of smaller companies and indivduals and are a fully fledged alternative to the traditional office set up.
 
In it's simplest terms, co-working spaces are defined as two or more people from different companies working in the same working environment to mutual benefit. These benefits include shared costs across rental and IT, and Telecoms charges, resulting in increased accessibility to smaller companies who would otherwise be priced out of the commercial real estate sector due to prohibitive costs.
 
Today, coworking spaces are popping up all over the world, with many leading brands such as We Work already offering a genuine global footprint throughout cities including New York, London, Dubai and San Francisco. Such has been the growth in this sector that We Work are now valued at in excess of $16 billion.
 
Despite the growth in providers, this market is still very much at an embryonic stage, and as more employers and companies becoming aware of the opportunities and benefits on offer throughout coworking spaces, the demand for this type of accommodation is growing at a considerable rate. In short, supply of coworking spaces cannot meet the demand in its current form. Indeed a recent report stated that 7 out of 10 co-working facilitators said that the availability of co-working desk space cannot keep up with customer demand.

Why Invest In Coworking Spaces?

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So why invest in coworking spaces? The key to answering this question lies in the rapidly expanding demand for this type of work space. Whilst the work environment of last 50 years has been defined by large scale factories and offices, today's workforce is structured around smaller and fluid corporate structures. Rather than the larger workspaces of yesterday, todays workforces demand greater flexibility, removed from the restrictions of long term, fixed asset commitments.
 
How Coworking Investment Works - The Gym Model
The key to the success of the companies within the coworking sector lies with a proven business successfully utilised by the large gymnasium chains. Whilst overall floor space will restrict the number of potential overall workspaces, the actual number of memberships per location often greatly exceeds this number (workspaces). Similar to the modern day gymnasium, members of these coworking spaces will often use the workspaces during a part of their working day, intermittent to meetings and other obligations. Understandably, this higher number of members per location (most providers utilise a series of membership/access levels) allows the providers to maximise the revenue per sqaure foot, often considerably higher than a standard tenant would generate across the same floor space.
 
The higher profitability within the business model of coworking spaces has understandably attracted the interest of investors who are currently looking to diversify their portfolio into higher yielding, low entry levels investments such as these.