Why benchmarking is helpful for coworking spaces

Flexible workspaces currently represent around 1% of the total commercial real estate in Europe and the US. In major business hubs around the world, the share of the flexible workspace in the total office space has increased to reach levels as high as 2% in NYC, 5% in London, Amsterdam and Singapore or even 15% in Bangalore.

In our view, the growth of the demand for flexible workspaces has been fuelled by several trends:

• Global mobility has never been so high, driven by online mobile and online technologies enabling people to work remotely and collaborate across multiple cities and timezones and the increasingly global nature of business.
• In Europe and in the US, the self-employed population keep increasing and with it, the demand for flexible workspace.
• Corporates are seeing an increasing need for flexibility to adapt to business change. Deloitte and Ernst & Young for instance have announced plans to relocate a significant share of their workforce (up to 30%) to flexible workspaces.
• Governments have increasingly supported their tech-ecosystem, indirectly driving demand for flexible workspaces.
  

Despite the overall growth of the flexible workspace industry, operators and landlords still lack the relevant tools to get accurate information on the value of their assets operated on the flex market. The spectacular fall of Wework and the total opacity of the performance of the market creates increasing concerns for landlords.

On the operator side, opacity might lead to inefficiencies: as Lord Kelvin put it “if you can not measure it, you can not improve it”. Operators lack the background needed to assess their performance by comparing it to the market in an up-to-date and accurate way. This creates a lack of information for operators who do not have a stable, sustainable source of market intelligence.

Other real estate verticals, from traditional (long - lease) real estate to hotels and short-term rentals have developed best-in-class solutions over the year that allow landlords, operators and other market participants to truly measure and understand the performance of their industry.

Measuring occupancy per desk, revenue per desk, per square meter per month and segmenting those metrics by category (membership, fixed, flex, team, meeting rooms and events) is the way forward for our industry. CoworkIntel is our response to this need: we are an industry-wide initiative to develop performance reports for the flexible workspace industry. Our platform collects and aggregates anonymously monthly performance indicators for the industry and makes them available to our operators who to operators subscribing competitive benchmarking reports.  

Our reports help operators:

• Set a background: is your occupancy / pricing on par with your comparable set, can you make changes that would quickly translate in higher revenues
• Compare year over year: how does your occupancy vary over time and how does that relate to actions form your side or specific events
• Discuss with their landlords: use objective figures to streamline negotiations with your landlords, draft better contracts
• Expand: what can you reasonably expect in terms of take-up time to long-term occupancy for  a new location, what level of profitability?

The platform is live in many regions. If you want to learn more, contact the CoworkIntel team at support@coworkintel.com

Sources:

https://nypost.com/2018/03/25/self-employment-is-a-rising-trend-in-the-american-workforce/

https://www.pewresearch.org/fact-tank/2019/08/29/facts-about-american-workers/

https://www.colliers.com/-/media/files/emea/emea/18039-flexible-workspace.pdf?la=en-GB