As economies make way for a plethora of small to medium business entrepreneurs, and big businesses realise the need for flexibility, the recent trend is increasingly towards shared working space. Economic downturns have encouraged the rise of many smaller enterprises which are being run from coffee shops or homes, but they do, on occasion need a more professional appearance.
This is one possible function of a shared working space. Another is for larger companies to rent extra space on a short term basis when requiring increased manpower for limited periods. “There are already many shared working space companies to be found in all the main business hubs, locally as well as worldwide, but it is likely that this trend will continue to grow exponentially,” says Leon Breytenbach, National Manager of the Rawson Property Group’s commercial division.
Shared working space
As the number of co-working facilities doubles year by year, many large corporates are relocating sections of their workforce to shared office space. “This concept is not just for millennial freelancers or tech start-ups, as many large international corporates find the trend works for them,” states Breytenbach. The fastest growing sector of the co-working market is made up of large corporates, many of which prefer short-term real estate contracts with flexible provisions. An ever growing number of companies will not consider leasing premises unless the building also offers flexible extra space.
These co-working premises are modern, high-end facilities offering a variety of workspaces ranging from a single desk to an executive suite or conference venue. They offer state of the art services such as reception, copiers, wi-fi, phone lines, cleaning services, a kitchen, free coffee or tea, or even snacks. Some offer a rest area or music room, but whatever their specific theme they are all conducive to a successful working environment. These spaces may be rented by the hour, the day, the week or several months as required, allowing companies to access space as and when they need it.
Core space versus flexible space
“Core space is property, either rented or owned, required by a company over the long term, to allow the business to function successfully. Flexible space on the other hand, is that which may be acquired quickly, as needed, with no long term commitment,” explains Breytenbach. Incorporating flexible workspace into a company’s business model offers employees an opportunity to benefit from the flexibility, while working more productively alongside like-minded teams.
Advantages to landlords or property owners
The transformation of under-utilised areas into shared work areas will offer the owner of a commercial property the opportunity to realise added income from such a space. Co-working facilities will add attraction to a building, encouraging a higher tenancy rate.
Having a small business operate in shared office space allows the landlord to build a relationship with the tenant. “As the company succeeds and grows, requiring more permanent premises, it is likely that they will choose to remain in that building, leasing a larger, long term space,” says Breytenbach. The landlord has had a chance to gauge the calibre of the tenant, so aiding his decision to retain or reject a long term application.
Many prospective commercial tenants are opting for premises where there is the possibility of accessing additional, flexible floor space. It may be a wise move, therefore, for property owners to redesign certain areas of their buildings in order to provide such space within existing properties.
“When designing the layout of future enterprises, however, commercial property developers would be well advised to allocate a greater area of space to the purpose of a shared working environment in order to keep their investment relevant to the current trend,” advises Breytenbach.
As the need for flexible space continues, the inclusion of additional draw-cards such as a gym or lounge area could prove to be the clincher when marketing your commercial property in the future.