Global giants are set to ramp up their co-working spaces in Auckland
Tuesday, 21 May 2019
Co-working space in Auckland is about to ramp up with global giants entering the market and leasing high profile properties.
Spaces, owned by international co-working giant IWG, has taken leases over several buildings in the Auckland CBD and will open the new shared spaces in a couple of months, real estate firm Bayleys announced.
US-based WeWork would be attending the CoreNet Global Conference in Auckland next week and would be discussing its plans, Bayleys said.
Spaces would add more than 1000 desks in Auckland - about a 20 per cent jump, Bayleys said.
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It has taken leases at a new building being built by Mansons TCLM at 155 Fanshawe Street, two floors in the huge Commercial Bay development being built by Precinct Properties near the waterfront, and at 501 Karangahape Road, where international electric car manufacturer Tesla has opened its first New Zealand showroom, office and service centre.
Bayleys will release its annual co-working report tomorrow tracking the trends in the sector.
Co-working space companies generally leased commercial real estate, redesigned it for sharing, and sold memberships.
Lloyd Budd, Bayleys commercial and industrial director and co-working specialist, said co-working desks made up about two per cent of Auckland's office space, more than twice what it was three years ago.
Although Auckland's co-working space was a lot less than other international cities where co-working formed 5 per cent to 10 per cent of overall office space, Bayleys' report showed Auckland's space increased by about 9792 square metres to 39,598sqm in 2018 and the market could take a lot more.
That growth was expected to continue with 17,160sqm of stock in the CBD in the pipeline for 2020 and another 21,600sqm expected to be delivered in 2021.
Co-working occupancy levels were high, at 81.3 per cent with 3864 desks currently occupied in Auckland.
The co-working sector needed vacancy to accommodate the rapid growth in its member base.
Auckland's co-working sector was dominated by Generator, owned by Precinct Properties, B:HIVE, owned by a Northland company Smales Farm, and BizDojo, owned by IWG which owns big co-working brand Regus. Their combined market share was 75 per cent.
Budd said the biggest trend had been the move to enclosed offices by co-working members who wanted identity with their signage, privacy and security for staff.
That could be seen as a return to traditional office space but in theory people in co-working space only spent a third of their time in the enclosed space and the rest outside the office or in a meeting or boardroom.
B:HIVE has built a five level building on the North Shore for small and large businesses and has provided about 800 co-working desks.
Budd said that had attracted corporates such as ANZ Bank and accountancy firm Deloittes who had taken memberships.
'Co-working has long been the norm for tech start-ups and creative companies, but it is now also attracting a more diverse range of corporate tenants seeking to tap into the start-up culture, cultivate innovation and win new talent and clients,' Budd said.
Significant market changes last year included the sale of Generator to Precinct Properties for $14 million and BizDojo's sale to Swiss-based IWG for an undisclosed amount.
It was understood Precinct planned to reposition Generator at the upper end of the market while IWG would continue to use the BizDojo brand for tech start-ups and innovation members, Budd said.
The average monthly desk rate was about $800 to $1000 in Auckland for quality space but the cost ranged from $400 a month to $1500, depending on the quality, range of services, facilities and location.
WeWork had offices in 280 locations across 86 cities in 32 countries while Spaces had leases in 180 locations across 50 countries.