Co-Working in Melbourne, The Changing Landscape of Office Leasing

By Robert Kelly June 15, 2017

Co-working is the latest trend set to likely impact Melbourne’s office leasing market.

Co-working, effectively derived from operating as a “co-operative” takes a modern approach to the serviced offices market in providing a flexible licence for occupation of a space on a short to mid-term basis, whilst reducing overheads. 


Co-working spaces generally comprise:

  • an open plan layout with modern, sleek or industrialised finishes
  • value add items to the core desk offering, including meeting rooms, relaxation areas
  • high speed Wi-Fi, catered kitchen facilities (some even including alcoholic beverages)
  • and a mailing address which gives a face to online driven businesses. 

Target Market

Co-working spaces generally attract “start up” businesses (or self employed). Those within the creative industries often prefer these spaces , as they can bounce off each other and network within the environment, however it will be interesting to see how this demographic changes in time. 

Co-Working Spaces.jpg

Having taken the time to speak to a “community manager” of a small co-working space in Fitzroy, the motivation is not to profit, but to produce a zero overhead workspace. Growth for this centre is organic, and turnover is low with a 90% occupancy average.

Not all of the co-working operations share the same motivation, as the larger enterprises operate for profit. Future growth of these businesses will inevitably require additional spaces. One example is “Hub Australia” which has various CBD locations in Melbourne, Sydney & Adelaide. 

Economies of scale are at play with this industry where a large space in excess of 100 desk capacity (1000m2 ) is required to run a commercially viable enterprise led with “personality” and savvy marketing.

From an economic perspective, the co-working industry is quite competitive as many operators have seen an opportunity to profit. There are approximately 200 known spaces in Melbourne which has seen an increase of 750% in the last 3 years (to July 2016)*.

It's important that owners of commercial buildings are aware of the changes in the marketplace to meet the market by considering open planning, energy efficiency, and end of trip facilities (bike parking, showers). Whilst co-working can be treated as an opportunity to attract enterprises, it should equally be treated as a threat to office spaces suffering functional obsolescence.

Where larger office space is struggling to lease and incentives are high, operators of co-working initiatives can be opportunistic as there is more likely a contrary demand for non-committal working spaces.

If you have a property that may suit a "co-working" environment or need help in leasing or managing your office property, contact us to discuss solutions.

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