Co-working: London and Berlin expected to be Brexit winners

Co-working is shaking up global office markets, following a record year for new co-working take-up, according to C&W’s ‘Co-Working 2018’ report, published this month.

The UK is the co-working space champion, accounting for a whopping 32% of global flexible working spaces, beating the US, with 27% and EMEA (excluding the UK) with 22%.

In London alone, flexible working places accounted for 230,000 sqm of all new office take-up last year, or 21% of the total, thereby tripling the previous year’s volumes. Moreover, it’s estimated that there could be around 930,000 sqm of potential co-working space available in London, more than double the 370,000 sqm offered by Amsterdam.

‘Co-working space doesn’t just offer flexibility and growth potential but also offers experiences, thereby having a very positive impact on corporate culture,’ said Heiko Himme, head of office agency Germany at C&W.

Over in London, WeWork, a US company that provides shared work spaces, has emerged as the largest taker of flexible spaces in the past five years, taking 239,504 sqm of space since 2012. This places it ahead of Google (124,862 sqm), Amazon (94,111 sqm), Deutsche Bank (79,711 sqm) and fellow flexible office provider The Office Group (79,246 sqm). In fact, such is its expansion that WeWork now has the largest volume of office space commitments in London, second only to the UK Government.

As the sector expands, so too has the average workspace unit size in London to 3,716 sqm, up from 1,393 sqm in 2015. There are now around 30 units in excess of 4,645 sqm in London, according to the report.

London may be leading the way but Berlin is busy playing catch up. Last year, around 75,000 sqm of co-working space were leased, more than a five-fold increase on the 14,000 sqm leased the previous year, according to C&W. The city’s popularity with start-ups - which thrive on low cost, low risk flexible spaces – is also boosting interest. WeWork is also expected to significantly increase the space it takes in Berlin.

For companies, the main attraction of shared work spaces is that they are not obliged to sign long leases, according to Elaine Rossall, head of UK offices research and insight at C&W: ‘Co-working not only offers flexibility and room to grow, but can also improve the employee experience, revitalise corporate culture, and minimise companies’ exposure to long-term leases,’ she said. ‘One of the additional key drivers of the market will be accounting changes that make shorter-term leases of flexible space more attractive to larger businesses.’

In addition, people need to think outside the box in terms of what can constitute a shared work space, Rossall stresses: ‘While offices have been the traditional source of space, pubs, hotels and libraries are increasingly of interest to flexible space providers, building on the popularity of coffee shops and cafes as flexible workspaces,’ she said. ‘Any brick-and-mortar business that is vacant for a period during the day could be utilised for flexible working. The availability of vacant retail premises could lead to co-working spaces becoming an integral part of high streets in Europe.’

Rossall expects flexible work spaces to account for at least 10% of the overall office market in the UK within the next ten years. ‘We expect a similar rate of growth elsewhere in Europe,’ she added. (ssk)