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Co-working is here to stay

Co-working is here to stay

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Shared or co-working spaces, where freelancers or professionals from different organisations work alongside each other in the same office, have been around for more than decade.

For much of that time, the stereotypical image of a co-working space has been a converted warehouse occupied by tech geeks and empty pizza boxes.

But co-working is not a fad. Shared work has now firmly established itself as the norm for a small but steadily growing percentage of the white-collar workforce. And it is not just technology professionals.

Backed by a combination of demographic, cultural and technological changes, the number of co-working spaces have exploded worldwide in recent years and continues to do so.

America, which had just one co-working space in 2005, is expected to have as many as 12,000 by 2018.

The number of memberships at co-working spaces worldwide is tipped to pass one million mark by 2018, according to some estimates. Shared workspaces have started to pop up anywhere there is an internet connection, from Spain, Rwanda, Bali to Moldova.

Australia is no different, with the trend towards co-working well and truly taking hold.

While there are no hard numbers on how many Australians are co-working, there is strong anecdotal evidence of pent-up demand for shared office space.

More than one year since GPT launched its co-working business Space&Co, which has locations in Sydney, Melbourne and Brisbane, the business has grown faster than we originally envisioned.

The Space&Co hub at Melbourne Central is already at full capacity for much of the week. We are already looking for opportunities within our own portfolio to open up more Space&Co locations.

While we do not expect co-working to dislodge traditional office environments as the norm for most white-collar workers, there is a growing population of professionals looking for shared working environments.

This shift has already been helped by the emergence of ‘cloud-based’ computing and mobile technology that has allowed people to work remotely. But the growth in co-working is set to gain momentum with an increased proportion of Australians becoming self-employed.

In Australia, the number of independent contractors or self-employed people who did not employ others, as a percentage of the workforce, has already increased from 6.7 per cent in 1978 to 9 per cent in 2013. But this trend is set to accelerate in the coming decade.

A recent report by the Committee for Economic Development of Australia (CEDA) , for one, flagged that technological changes could result in 40 per cent of existing Australian jobs being obsolete within the next 10 to 15 years. This will give rise to more workers – particularly in the white collar sector – leaving full-time jobs to work for themselves as freelancers and many of them wanting to look for shared office space.

The CEDA report also noted the growth in independent contracting was not in low-paid blue-collar jobs, but in white collar employment thanks in part to the growth in personal services such as management consultancy and financial services.

This trend has already been playing out in the US, with the surge in workers shifting toward contract-based or freelance work since the start of the financial crisis. There are estimates that 21.1 million Americans or 13.6 per cent of the workforce are now independent contractors.

Across Europe, the number of independent professionals increased 45 per cent between 2004 and 2013. The shift towards co-working will also be reinforced by companies wanting to have more flexible workforces – and in turn more flexible options in renting office space. At our Melbourne Central Space&Co, for example, we are already seeing some of our existing office tenants in the building wanting to occasionally use the co-working space when they need additional space on a short-term basis.

Then too, there is the trend for large companies to offer their full-time staff more flexible work arrangements for work-life balance reasons.

This can be seen with some firms allowing staff, who have to commute long distances, to occasionally work in co-working centres closer to their homes. One large Australian corporate is already conducting a pilot trial for some of its staff at our Rouse Hill Town Centre Space&Co in north west Sydney.

There are even companies giving staff allowances to book desks at these locations in order to break the monotony of working in the same location in order to boost morale and get the creative juices flowing.

Then too there is the fact that some people just like working in shared office spaces, where they can get a sense of community, collaborate and network with other professionals.

Either way, there are plenty of solid reasons why co-working is set to become the norm for a small but growing segment of the workforce.

Matthew Faddy Head of Office & Logistics: Matthew has over 20 years’ professional experience in leading successful teams in property, including finance management, funds management, asset management and portfolio management. As Head of Office & Logistics, Matthew is responsible for the investment, asset management, and development of the group’s portfolio of office and logistics assets. Upon joining GPT in 2006, Matthew was responsible for the launch of the $1.9 billion GPT Wholesale Shopping Centre Fund. Prior to his role as Fund Manager, Matthew was the Head of Retail for Lend Lease’s Retail Group, responsible for the asset management of a portfolio of over assets for both GPT and the Australian Prime Property Fund. Prior to his move into property, Matthew spent five years in the audit group of chartered accounting firm PWC.

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