The traditional offices have recently been superseded by coworking spaces which have proliferated all over the world.
Shared spaces concept is not only great choice for small and growing businesses but also chosen by big corporations.
It brings about the creation of a thriving community and fostering networking, such offices are becoming more and more popular among millennials and, thus profitable for their owners.
According to a survey conducted by Deskmag, a magazine about coworking, about 1.7 million people will be working in some 19,000 coworking spaces across the globe by the end of 2018. Of the total number of coworking spaces, 29 per cent were opened over the past two years. About two-thirds of that total anticipates expanding their area by an average of 70 per cent, and a third are planning to open at least one more location.
In Nigeria, the development is fast usurping the traditional office space, creating more void than anticipated in that segment of the industry.
Co-working is a service provision model that involves individuals working independently or collaboratively in shared workplace or office but with independent activities. Typical users of the facility are the self-employed, entrepreneurs, international corporations with subdivisions across countries, or a company worker in private and public sectors.
The concept enables variety of businesses especially, the small and medium enterprises (SMEs) to work in the same start-up office space in strategic locations, without breaking a bank to pay for the costs of rent and it also offers benefits such as; 24hours Internet, constant power supply and other general operational overheads among other flexible packages.
Town planners see co-working station’s growth as a possible way to address the decline of high street retail in most of the urban centres.
According to investigations, since 2006, the market has become a goldmine with some international companies running the model across 20 different countries, including about 160 locations in the United States of America that comprise more than 10.7million square feet. It has also gained some degree of acceptance in Ghana, Nigeria, China, India, United Kingdom, Australia, Malaysia, South Africa and others.
The popularity of the model is not declining, as a recent report by JLL Global co-working survey revealed that 61per cent of co-working space providers are planning to expand their operations and almost 80 per cent expects the number of members to increase while statistics state that co-working spaces globally have been on a steady increase each year and it is predicted to have reached about one million in 2018.
An operator of the model in Lagos told The Guardian that, “With growing office space needs, co-working facilities offer flexible, amenity-rich options and are often situated in highbrow locations of the city centres. Operators with multiple locations have expanded their targeted tenant type, and are now using their economies of scale to appeal to large corporations. All you have to do is pay one-month fee or more depending on the individual financial capability, plug and work, no matter how long or short you require. Prices start from N70, 000 or below in most centres in Nigeria including Lagos, Port-Harcourt, Abuja, Kaduna, Ibadan and others while longer rental periods attract generous discounts”.
Speaking on the effects of co-working office space development on the commercial real estate sector in Nigeria, the Chairman, Faculty of Real Estate Consulting of the Nigerian Institution of Estate Surveyors and Valuers, (NIESV), Mr. Niyi Fadoju believes that it’s a response to the demand of the present time as the orthodox offices are no longer in en-vogue coupled with the reality that rents have also gone higher. Additionally, he noted that businesses has also gone paperless while in other part of the world, people now work from home.
He explained that the idea is equally a response to the fact offices couldn’t be rented as some developers continue to experience voids and long term loss of revenue. According to him, the traditional office space couldn’t fit into the demand of the current time, hence, co-working station has met the demand and so you could see the transformation of the some traditional offices who couldn’t secure tenants because of; their size, facility available and so, some business men moved in, set it up and create co-working spaces out of it to make money.
“Co-working concept arose from the need of the present time and the necessity to manage the cost of rents and the scarce resources as things has become very expensive.
Some people have so much space but couldn’t rent it and they discovered that the demand in the market is a place where they could work, when they need to and where they could have their correspondence. A lot of upward mobile businessmen particularly the young men, don’t need the big office. They just need a place where they could pick their mail, have a meeting and go away. How many people have secretaries these days, that write with long hand”, he said.
According to him, many businesses are looking in the direction of co-working space as it’s growing even faster in the commercial capital of Nigeria, Abuja.
“Many years ago, it used to be just one but now, you have them scattered around town. We could still do with more but they are not as many as they are in Lagos, being the commercial capital of Nigeria. The business environment might make the traditional office space to fade away with time. What we have will always respond to the demand of the business environment and that of the society. Those that wants to remain in traditional offices with time, if they don’t adjust to the co-working space, will find out that their market share in business will reduce”, he added.
He said, “If we don’t have the model, people that should have being going for the traditional office market would have doubled. One way or the other, it will affect the income that naturally should have accrued to that sector. It is a matter of upgrading facilities in such a way that it would compete favourably internationally. Businesses are now automated; there is no basis to ever do business with some level of mediocrity anymore as people are upgrading to compete globally”.
Speaking with The Guardian, Chief Executive Officer of Workbay Executive International Limited, Gbenga Aiyremi stressed that the demand for the office space model has become so high in recent time as businessmen and entrepreneurs see the model as the fastest means to start business devoid of the struggles associated with looking for nice space and adequately equipping it.
According to him, the traditional office space will soon fade away because the value proposition of co-working is huge. People don’t just rent offices via co-working stations, but they get Internet, recreational centre, conference room, opportunity to network and collaborate and so clients are enjoying it because it’s like a community and nobody wants to operate business in isolation”, he stated.