The Future of Flexible Work Spaces in South Africa
Category Commerical Property News
As an alternative to traditional office leasing, flexible workspace (comprising of co-working spaces and serviced offices) accounts for around 8% of global office space. This number is expected to rise to 30% by 2030.
The concept of flexible working spaces has, contrary to popular belief, been around for over 20 years. The first ever one was created in 1995 by 17 computer engineers in Berlin to exchange ideas and codes and meet like-minded people, aptly called "hackerspaces".
Fast forward about two decades - there are roughly 19,000 different co-working spaces worldwide with over 80 million square feet of flexible real estate. The US is the current global leader when it comes to flexible real estate, with WeWork accounting for 33% of the marketshare. Locally, we can attribute this shift to a tense economic environment and the growth of the freelancer industry which is still the largest coworking demographic in the world, according smallbizgenius.
Is South Africa becoming more flexible?
South Africa has lagged behind this global trend, but this market has seen an upwards curve in recent years. For many, aspects like high traffic volumes, load shedding and unreliable public transport make the daily commute to work tedious and sometimes impossible. Other political and economic shifts have forced many of the skilled workforce to look at entrepreneurship and the freelancing culture. The move towards flexi-spaces for businesses to operate from is a strategic solution in the midst of the economic downturn.
Flexible work spaces also offer more of a work-life balance - "Suburban areas have become the destination for many companies who prefer to move nearer to where their employees are. The rise of mixed-use developments like Melrose Arch or Waterfall City that mix office space with retail and plenty of places to relax also means that employees can live work and play in the same area," reports Cape Business News.
Who are South Africa's main players?
In the past few years, the number of co-working spaces, flexible and serviced offices has increased dramatically. Nobable players among these are The Business Exchange Africa, the ultra-modern FutureSpace, business-like Cube Workspace Solutions, Workshop17, The Workspace, international reaching Regus and its Spaces brand, and of course the largest global player, WeWork.
Easy month-by-month membership options, flexible costs, accessiblility of internet and the community aspect of such places are what add to their appeal.
The future of flexible work spaces
CBRE's flexible office market research for 2019 reveal a higher global demand for flexible working spaces in the coming years, serving a larger and more diverse group of people. Businesses of all sizes will seek out a flexible real estate strategy, where previously it was seen as a niche offering for freelancers, remote workers and start-ups.
Large enterprises too are seeing the value in flexible working spaces. Varying business requirements mean that agility, speed, short-term contracts, multiple-location use and capital deferral are huge drawcards not otherwise attainable through traditional leasing.
Ben Hatchwell, Director at OfficePlace says, "While there is no official data which represents how much of the local office market has been infiltrated by flexible working spaces, from our insight at OfficePlace we can confidently say that in the future, this sector will only increase its demand. While not a trend yet - large corporates too have been embracing the flexible office environment."
Outlook
As seen in the CBRE report, the real estate industry is not generally a first-mover when it comes to trends that might disrupt the value of the sector. However, the explosive growth of flexible office space is not surprising. Locally, small businesses employ 47% of South Africa's workforce, contribute more than 20% to the country's gross GDP and pays about 6% of corporate taxes.
While not for everyone, flexible real estate is a sector that cannot be ignored.
If you're looking to explore different options for your business, contact one of our OfficePlace brokers who can help you find your perfect fit.
Author: OfficePlace
