Co-Working Spaces – A unique concept of shifting traditional offices to more evolved and flexible office setups

Posted on: 12-03-2024

Co-Working Spaces – A unique concept of shifting traditional offices to more evolved and flexible office setups

Co-Working Space Market Overview

As per our analysis, the global co-working space market will witness a CAGR of 17% during 2023-2028, reaching USD37 billion by 2028 from USD17 billion in 2023.

Notably, the popularity of co-working space has risen due to its flexible work environment, low operational costs, less logistic hassles, and access to various facilities or amenities offered by the providers, such as high-speed internet, conference rooms, workstations, private offices, cafés, lounges, etc.

Moreover, providers offer personalized services to their customers, including childcare facilities, on-site fitness centres, laundry facilities, and various other amenities. These services are pivotal in attracting potential clients and driving market expansion.

Co-working spaces have primarily appealed to startups. But, in light of the uncertainties surrounding the pandemic-related challenges, larger organizations around the globe are also considering a shift from long-term leases and owned facilities to flexible workspaces.

Furthermore, to develop more diversified teams far away from the headquarters and to manage their team expansion more flexibly, many big companies like Microsoft, Facebook, and Apple have embraced the concept of co-working spaces. This has contributed to a substantial market expansion, making it a favorable choice in numerous countries. The co-working space sector has observed remarkable growth across various regions, including North America, Asia Pacific, Europe, the United States, and China.

Co-Working Space Business Model

Membership Plans and Services Provided by Co-Working Spaces

• Hot Desk Membership Plan: This plan provides co-working space during business hours without a fixed workstation along with all necessary office equipment. This is convenient for people who are working from different locations and who need it for a short time period
• Dedicated Desk Membership Plan: This reserves a dedicated workspace within a shared office environment. This is ideal for remote workers or freelancers needing a dedicated workspace. It also provides access to meeting rooms and other common areas
• Private Office Membership Plan: This offers a private and independent workspace for teams to collaborate, making it a convenient choice for startups, small to medium-sized teams, and remote & hybrid employees
• Virtual Office Membership Plan: This plan provides an office environment to WFH (Work from home) employees and offers facilities such as a co-working service provider address for official mail and packages, meeting rooms and common areas, etc.
• Community Membership Plan: This offers excellent value at minimal costs. It also provides access to the digital community, event tickets, and discounts on meeting room rentals, etc.

Drivers

	With the rise in the number of startups, small businesses concentrate more on lowering renting expenses
	The cost-effective method offers affordable rental alternatives with enticing features such as desks, Wi-Fi, meeting rooms, etc.
	The rising trend of professions embracing remote work or working from home has created a greater demand for virtual and co-working spaces
	The surge of investments in niche co-working spaces such as women-only spaces, LGBTQ+ spaces and other social groups is anticipated to present lucrative prospects within the market
	The market's growth is being propelled by the adoption of technological innovations and the incorporation of automated process features in co-working spaces

Upcoming Trends

Co-working spaces are poised to become even more popular in the future as they continue to introduce new features and amenities. The following points illustrate the key trends in the co-working space industry:

Specialization: We expect to see far more niche co-working spaces in the market, and industry-specific office spaces will become more common as existing market players strive to remain competitive

Multi-City Locations: While many co-working space providers already offer multi-city locations, this trend is expected to continue. Many providers are entering into partnerships with restaurants and hotels to provide business-centric services

New Amenities: Many new amenities are expected to emerge in the co-working space market. As a response to COVID-19, virtual office space has already become a popular concept. However, other exciting amenities like babysitting facilities, functional kitchens, wellness rooms, and more will emerge

Health Protocols: Co-working spaces will now be ready with all precautions, such as sanitization stations, social distancing, HVAC air filters, and other health safety measures to tackle any global pandemics such as COVID-19, etc.