The rise of co-working spaces in major office markets is driving a new wave of tenant demand on Australia’s eastern seaboard, with start-ups, major corporates and shared space providers driving the trend.
CBRE is currently working with a number of shared space providers on securing more than 30,000sqm in Brisbane, Sydney and Melbourne - in addition to having negotiated 15,000sqm worth of transactions with industry groups in the past 12 months.
“Co-working offerings have been expanding across the country’s eastern seaboard with more enquiry yet to find a premises,” CBRE's James Comino said.
“Occupiers are continuing to seek increased flexibility in their office premises, which is helping to create more shared workspaces within buildings that offer the opportunity to expand and contract in and out of easily without long term commitments.
“They also act as an incubator space for tenants to get comfortable within a building, often committing to larger tenancies on a direct basis with a landlord over time.”
Evidencing the trend, Australia’s largest flexible office provider, Christie Offices, has secured its newest co-working space in the Brisbane CBD, signing a10-year lease on 3,501sqm across three podium levels in 240 Queen Street.
The space will be used for the office provider’s ‘CoWork’ business platform and include a greater co-working component than its traditional serviced office model.
Other recent transactions also include The Workstation in Brisbane – 1,250sqm at 179 Turbot Street, while in Sydney, CBRE has negotiated more than 4,000sqm with VCSO, Co-Ten and Ultimate Office Solutions.
Active requirements across all eastern seaboard city markets also include WeWork, The Commons and Start Up Hubs – with scope to collectively occupy over 7,000sqm in each city.
CBRE’s Mark Semple of Sydney said there was also strengthening interest from international co-working groups seeking to get a foothold in the expanding Australian market.
“Serviced office providers have dominated the shard space market for some time, however, the co-working model provides a more casual and creative atmosphere for smaller groups to interact with like-minded entrepreneurial professionals, in prime CBD positions,” Mr Semple explained.
”Co-working providers target a defined group such as technology, and focus on that refined market and being the best provider in that space. Larger companies that may be suburban-based will deploy their IT or tech departments into these co-working spaces to retain and attract talent and to mix and share ideas with other co-workees.”
Mr Semple said nearly 75% of start-ups were now based in co-working spaces – highlighting the growing need for start-up hubs in major cities.
“Many Sydney sites now have long waiting lists and are facing growth constraints in a low-vacancy environment - leading to suggest that the NSW Government’s plan for a 15,000sqm start up hub in or near the CBD is desperately needed,” he explained.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The Company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website atwww.cbre.com.
