Join the office space revolution
Thursday 4 July 2019
Flexible working spaces are more than just a fleeting trend and the launch of a new co-working serviced office franchise programme will open up the market to investors.
By Miriam Bell
The co-working space industry is a high growth one which is estimated to be expanding by 24% each year.
It’s projected that by 2020 50% of all workers will work remotely most of the time and that by 2022 the global mobile workforce will be 1.87 billion people.
When it comes to accommodating this, real estate giant JLL estimates that up to 30% of corporate real estate could be flexible workspace by 2030.
That means there are opportunities for commercial property owners willing to make the leap into the brave new world of flexible working space.
Now one of the world’s biggest flexible workspace providers, IWG, has launched a programme which opens the co-working serviced office market in New Zealand up for franchise.
IWG New Zealand country manager Pierre Ferrandon says their programme enables commercial property owners to enter the flexible workspace industry – with assistance and support.
“It’s an opportunity to diversify away from traditional franchise industries, and benefit from strong cash returns and significant double-digit returns on investment.”
To be a part of the programme, property owners need to have several properties and IWG will work with them to add value to the properties and to market them to high-quality commercial tenants.
Ferrandon says that, enabled by technology, businesses want to diversify their operations in different regions, to go where the talent wants to live and reduce the operating costs associated with major centres.
“Increasingly, we are seeing corporate employees wanting to work outside the big cities, and companies are following suit.
“In our business we have seen big companies choosing flexible working in the regions for cost and lifestyle reasons but with no downturn in revenue.”
But the growth in co-working spaces is not just driven by a corporate desire to cut costs.
Businesses – be they small start-ups or big corporates – are increasingly making use of flexible work arrangements as a talent attraction and retention tool.
Additionally, more and more remote workers and freelance/contract workers are being attracted to the facilities and business communities that are a key part of flexible working space.
Ferrandon says this all equates to major opportunities for commercial property owners all around New Zealand, not just those in the main centres.
“Flexible working space is becoming a big part of the commercial office sector. It’s thriving and attracting lots of interest, so moving into the provision of such space is a good business move.
“It also gives property owners the ability to take a less traditional approach to their leases. Filling vacancies with fixed leases can be problematic sometimes. Providing flexible space can help alleviate that.”
While it has been a slow take off for the co-working space concept in New Zealand, that is changing fast, he says.
“IWG has been here for over 13 years. We used to get about 60 enquiries a month, now it’s about 420. And there’s been a big increase in the number of flexible working spaces and companies around.
“But most are smaller operators and they struggle to provide the range of facilities and arrangements that businesses want.”
In contrast, IWG has the scale, the corporate contacts, the global network and infrastructure, and a proven business model with different brands to suit different customers, Ferrandon says.
That’s what their franchise programme can offer to commercial property owners interested in moving into the provision of flexible working spaces.
Mansons TCLM director Culum Manson says everyone now wants flexible space built into new buildings.
The co-working model perfectly aligns with modern business (and Gen Y’s) non-negotiable demands for a “reduced environmental footprint” and a “greener more efficient use of workspaces”, he says.
“Working with a credible global operator like IWG is a no-brainer and their franchise opportunity is an idea whose time has come.”
Comments from our readers
Sign In / Register to add your comment
Open homes are forbidden and real estate transactions are in hiatus during the lockdown, but that doesn’t mean it’s not possible for investors to find a deal.
As New Zealand begins to settle into the “new normal” of the Covid-19 lockdown, commentators have started releasing their (tentative) outlooks for the housing market. Here’s a summary of some of them...
Major lenders have launched mortgage holidays for borrowers affected by the Covid-19 outbreak, using online application forms to process customer requests.