Coworking Moves into New Markets
When coworking spaces first emerged as a worldwide trend over a decade ago, they were primarily used by individual freelancers and small startups who needed a space to work and build their businesses.
Coworking space provided a creative environment; an ideal place to meet other freelancers and take part in networking events, exchange ideas and meet prospective clients. Coworking space typically included a large common workspace, a few private office spaces, and cafe and lounge areas for taking a break and talking with coworkers.
Coworking Space Goes Mainstream
Recently, an important change has occurred: coworking space, a concept that was once considered unconventional, seems to have become mainstream. Mid-size and enterprise businesses (companies like Microsoft and Salesforce with over 1000 employees) are now increasingly renting coworking spaces as they expand their businesses. For example, WeWork, a coworking company that was founded in New York in 2010 and is now worth $21 billion, currently rents to 100 of the Fortune 500 companies with worldwide office locations. Even though WeWork only started renting to enterprise clients in 2016, enterprise clients now provide 20% of WeWork's revenue.
Coworking spaces offer an attractive, flexible deal for employers because they offer short-term lease agreements (usually month-to-month). This differs from traditional corporate offices, which usually lock employers into long-term leases of a year or more. In addition, coworking company services like networking events and in-house cafes and lounges are attractive perks for large companies to offer their employees.
Luxury Coworking Spaces
Over the years, one of the most common criticisms of coworking has been that the typical open workspace can be crowded and noisy. While great for networking, the open workspace and frequent conversations with coworkers is sometimes distracting for people who prefer a quieter work environment.
Recently there are new coworking companies that provide more upscale workspaces with amenities usually found in a high-end luxury hotel or an airport business lounge. These luxury spaces provide larger work areas, more private offices and more quiet areas, albeit at a higher price point. Some of these high-end spaces are so expensive and exclusive that they are more like private clubs, with an emphasis on networking and social events. Prime examples in the U.S. are Neuehouse and Soho House in New York City. One of the most high-end coworking companies in Asia is The Great Room. It currently has offices in Singapore and Bangkok, and it plans to open work spaces in Jakarta and Hong Kong by the end of 2018.
Future of Coworking: The Gig Economy Meets Luxury
Coworking emerged as a consequence of the gig economy, but it has proved to be a popular trend for freelancers and full-time employees alike. It has also expanded its reach into the luxury market.
It seems clear that going forward there will be increased diversification in coworking spaces, as well as greater customer stratification. Each workspace will have its own design preferences and features, geared either to startups and freelancers at a lower price point or to more affluent clients. In other words, choosing a coworking space might start to resemble finding a hotel, based on its price, design, location, features and amenities.