When businesses make the decision to become members of a co-working space rather than take out an office lease, many are looking outside of the central business districts of the major cities and into the suburbs where their employees and clients live.
Co-working has been a big growth story in Australian business and commercial property over the last few years, and according to Office Hub, there are now 26% more co-working locations nationally than there were in 2017.
According to analyst group Coworking Resources, in 2019 Australia is the sixth fastest growing co-working market in the world.
“For many small and medium-sized businesses it doesn’t make sense to take out the traditional three to five year office lease,” says Stuart Brown, chief executive of WOTSO WorkSpace.
“That model carries too much risk and is just not fit for purpose any more. They are looking for more flexibility.”
WOTSO operates more than 15 co-working locations around Australia, with one offshore in the Malaysian capital Kuala Lumpur, and is increasingly looking at locations outside of the main central business districts as a key part of its growth strategy.
“As a provider of office space to small and medium businesses we want to locate our workspaces where they are, and that is out in the regions and suburbs,” says Brown.
“All the things that are attractive to businesses about being in a central business district, such as shopping, parking and transport, you can find in the major suburban shopping centres.”
As part of that strategy, WOTSO is working with Scentre Group and offering co-working spaces in a growing number of Westfield Living Centres around Australia.
WOTSO’s first foray into a shopping centre space was at Westfield Chermside in Queensland in July 2018. And in its first year, the space has been reconfigured three times to accommodate more and more members and it currently has a waitlist.
A second, 1200 square metre WOTSO will open its doors at Westfield Woden in the ACT in early December 2019.
“The proximity to services which our members want to use is the real driver for this demand,” says Stuart Brown.
“In the case of Westfield Chermside, you have on-site parking, childcare, a new restaurant and dining precinct, there are major supermarkets, good coffee, a gym, doctors and bank branches – all the amenities which our members want to use before, after and during their work day.
“And all this is close to where people live, and where their customers are.”
Scentre Group Director Leasing and Retail Solutions, John Papagiannis, agrees: “With our population growing and ageing, urbanisation on the rise and average household sizes on the decline, we’ve seen a shift in the way our customers are looking to our centres as social and community hubs – as spaces to exchange ideas, relax, socialize, enjoy experiences and build relationships in their local communities.
“We describe our centres as Living Centres because they are extraordinary places where our customers come together to socialise, shop and be entertained, and we are also seeing that co-working can be a part of that mix.
“WOTSO has become a natural extension to our community at Chermside, and that interaction between retail and commercial creates a real energy and brings with it a regular flow of new and potential customers.”
It is not just individual creatives and consultants or small startup businesses who are looking for this type of space, because the number of larger businesses with 15 more employees looking for flexible office space in Australia has more than doubled over 2018.
WOTSO’s Stuart Brown observes that the co-working model is also attractive for more established and larger companies with bigger headcounts, and even for multi-national corporates looking for a wide geographical coverage rather than concentrating employees in one location.
“Some multi-nationals might have a head office in Sydney and Melbourne, but beyond that they only need 100 desks in the WOTSO network Australia wide because they need their people to be on the ground,” says Brown.
There is also synergy between the WOTSO WorkSpaces and the Westfield Living Centres which host them as tenants interact with each other by offering services, and as the WOTSO spaces are used for an increasing diversity of events.
“The co-working spaces are also an amenity to other retailers in the Living Centre,” says Brown.
“We’ve had product launches and meetings booked by the tenants, so there are some interesting interactions between the retail and co-working space developing and we’re sure that will gain momentum over time.”