The Instant Group have released their 2017 Global Cities Report, an analysis comparing flexible workspaces in major cities around the world. The report offers “a snapshot view of the developments in each of the global cities” and looks to where the market is heading next.
The increase in demand – the market has grown 18% in 12 months – for flexible workspace has effectively seen a 30 year-old industry rebrand itself to be at the forefront of disruption to the conventional procurement model for commercial real estate.
The report indicates that the number of enquiries for flexible workspace in Australia have tripled in just two years, while co-working and flexible office space has grown by up to 36% in five years.
With emerging markets showing larger proportional growth than more established ones, co-working is steadily changing the current working environment.
The report revealed which markets were leading the way and where the industry was headed.
Enquiries for Flexible Office Space in Australia Triple in Two Years
$565 – average desk space in Sydney
The number of enquiries for flexible workspace in Australia have tripled in just two years, while co-working and flexible office space has grown by up to 36% in five years.
This increase in Australian supply exceeded that of the world’s largest market for such space – London – which grew from 9% to 16% in 2016. It also outstripped growth in New York, which has long been one of the fastest growing flexible work centres in the world.
Sydney saw 19% growth in 2016 with co-working and hybrid space growing three times faster than serviced offices. With an average workstation rate of $565 per person, per month, Sydney was the 11th most expensive key market in which to rent space, while Melbourne is the 13th at $480 per person, per month.
US Boasts the Highest Average Desk Rates in the World
$1, 110 – average desk space in New York
Around 37% of space in New York, Los Angeles, Chicago and San Francisco was described as co-working. Despite the maturity of these key cities, each grew more than 15% in the past year.
Average workstation rates in the US were more than $900 per person, per month, making it one of the most expensive locations in the world for co-working. Despite this, US cities showed an upward trajectory and have grown 12% in the last 12 months.
Renting a Desk in London is 19% Cheaper than in New York
$897 – average desk space in London
With 16% growth in 2016, London saw expansion of new operators and additional centres, with key expansion occurring in cities like Manchester and Birmingham.
At $897 on average for a desk space in London, the capital boasted the fifth highest workstation rates of all key cities after New York, San Francisco, Chicago and Los Angeles, largely due to increased demand within the city as large-scale projects take off.
The Flexible Workspace Market in Hong Kong Doubled in Size in Two Years
$616 – average desk space in Hong Kong
The flexible workspace market in Hong Kong experienced 16% market growth in the last year and doubled in size in just two. There are now 202 flexible workspaces in Hong Kong compared to the 330 in New York and 1,136 in London.
Growth is fuelled by increased demand for flexible space in a city that boasts some of the most expensive real estate in the world when it comes to the conventional office market, and more businesses are realising the benefits of procuring flexible space to save money. Average desk rates in Hong Kong are $554 compared to London’s $897, putting it at 10th place among key markets.
Renting a Desk in Singapore is 57% Cheaper than in New York
$472 – average desk space in Singapore
With 22% centre growth in 2016, Singapore was the 14th most expensive place to rent desk space of all the key cities. Over 90% of co-working centres were located in the CBD in Singapore, where at $472 per person, desk spaces were 57% cheaper than in New York.
There was already an increase in co-working space in the city, but further growth is expected for the second half of 2017 as new operators open locations within Singapore.
Costs of Desks Decreasing YoY in Shanghai
$505 – average desk space in Shanghai
Flexible workspace centres have grown by 20% in the last three years in Shanghai, with 62% of all co-working centres located in the central areas of Huangpu, JingAn and Pudong. The rapid rise in co-working is largely attributed to government support, strong infrastructure and a growing millennial workforce, which has led to an increase in centres and market operators. It was the 12th most expensive place to rent a desk of all key cities.