The rise of the co-working space

By 2030, co-working spaces could account for 30% of corporate office portfolios

April 2018

Words by Katie Puckett

WeWork offices in Chelsea New York
WeWork in Chelsea, New York, one of 171 locations in 64 cities. Photo: WeWork

The co-working space is the ultimate networked office. The concept has come a long way since its origins in 1990s Berlin and the earliest community-oriented “hackerspaces”. Some co-working locations welcome all-comers and let them get on with it, while others host a carefully curated blend with community managers to facilitate interactions.

Co-working spaces started as hubs where freelancers and entrepreneurs could make connections and build a support network, but their extraordinary proliferation has been driven in part by large corporates. They offer memberships as a perk, to free up fixed desk space or to tap into the creativity and innovation of local start-ups.

"Traditional offices don’t work because people don’t like them. Co-working is the canary in the mine”

Jeremy Myerson, WORKTECH

Today a co-working space might be little more than a grungy “coffice” with a high tolerance for laptop users nursing a single latte. Or it might span many thousands of feet in a slick downtown location, with custom-branded spaces for large companies. It may just be a restaurant that would usually be closed during the day. Or it could even be someone’s house: the Hoffice community supports individuals to turn their homes into free co-working spaces for the day and invite like-minded people to join them.

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Global brand WeWork offers individual and corporate memberships at more than 170 locations. Firms can lease floors or entire buildings, or hand their own space over to it to fit-out and manage. It is now the largest corporate occupier in central London — only the UK government has more office space. Its footprint in the financial district alone doubled in 2017.

“We see a lot of different types of business collaborating,” says Eugen Miropolski, managing director for Europe and Israel. “At the beginning, there were a lot of financial services companies, then a lot of start-ups, but now a lot of larger corporations like IBM or Barclays are coming to join that community. When you have that mix of different types of businesses and companies, you get a very unique type of collaboration.”

Large corporates make up 20% of WeWork’s membership

By 2030, co-working spaces could account for 30% of corporate office portfolios, according to JLL. “Organizations are having to absorb tremendous amounts of geopolitical and macroeconomic change, and they’re having to change their workplace at a much more rapid rate,” says JLL’s Carroll. “Co-working space gives them the ability to flex rather than fix their real estate requirements.”

From The Possible, issue 03

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Co-working has become synonymous with cool, beautifully designed spaces, a high-quality service and, of course, great coffee. They’re this good because they have to be: co-working spaces must compete to attract a footloose market and they have elevated it into an artform. “Co-working is the consumerization of the workplace,” says Myerson. “You’re paying for a service and if you don’t like it, you can go somewhere else. That’s why they are so acutely attuned to building communities and providing the right atmosphere and ambience. They’re constantly iterating in a way that traditional workplaces are not.”

How can corporates and developers compete? If you can’t beat them, join them … “Bigger businesses are starting to realize that they’ve lost their mojo and they’re wondering how to get it back, so they’re taking a page from co-working, creating curated experiences with a strong sense community within their office space,” says Wright at HOK. “Developers are setting aside 10 or 20% of their portfolio to provide a co-working for the building, a great big space that everyone can use. It’s becoming an amenity — just like years ago, having a gym in a building was an amenity.”

“London is the global leader in terms of the growth and maturity of the market. But it’s still only 3.5% of office stock”

Tom Carroll, JLL

Could co-working spaces ever replace the traditional office altogether? Unlikely, says Kerr at Harvard Business School. Centrally located, beautifully appointed co-working space is inherently expensive, and it offers little protection for intellectual property, especially in a fluid, mobile layout. “Companies will continue to choose the model that is most effective for their needs, and some will employ both approaches in different parts of the organization.”

This article appeared in The Possible issue 03, as part of a longer feature on the future of the workplace


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