LAST THURSDAY, The Australian Financial Review published an article (page 42) by Mercedes Rueh highlighting the emerging trend of Hubs and co-working spaces in Melbourne and other Australian capital cities.
What you need to take away from the article is that the nature of work is changing. And therefore, creating new opportunities for you and other Commercial property investors, who are flexible and forward thinking.
What are Co-working Hubs?
Co-working spaces are shared offices with most of the facilities that you would find in a normal office — such as Wi-Fi access, audio visual equipment, coffee machines.
They can be large open working spaces with tables; or split into larger and smaller rooms. It just depends on the style and preference of the users for the space.
Individual and groups workers are able to rent space for hourly, daily, weekly or monthly fees or set monthly fees.
You are starting to find these Hub facilities popping up in most Australian capital cities.
Who Actually Uses Shared Work-spaces?
Co-working spaces are the first choice for many ‘bootstrapping’ start-ups because they offer the features of a normal offices space with lower costs. But it is not just small start-ups using this Hub format.
Deloitte, AMP Capital, The NSW Government, The GPT Group and CBRE are just a few of the companies experimenting with dynamic work spaces.
These spaces are becoming more popular because they foster creativity, collaboration and community which benefit employees and managers.
The demand for co-working spaces is only increasing – as office workers, specifically Gen Y, demand work that is more flexible and engaging.
However, in March 2018, the Waterman Group took the bold step of taking a 7,500 sqm building in Scoresby (29 km from Melbourne’s CBD).
And they plan to target major corporates (as opposed to just startup companies), looking to augment their current space – as their “project work” ebbs and flows over time.
What Does this Mean for Landlords?
The uses of commercial property are changing in many ways. And the emerging co-working trend offers you the opportunity to add value to your properties.
At the end of an existing lease, or when a tenant vacates — you could clear out an older office building floor. Then refurbish the office with as a modern co-working space.
The secret then lies in securing one of the emerging, more-progressive Corporates. Or a single “entrepreneurial” head tenant … who will then assume responsibility for arranging and coordinating all the smaller users.
Bottom Line: If you simply allow yourself think outside the box and recognise emerging trends in the Commercial property market … you’ll always be able to find opportunities to significantly add value to your older portfolio.