In 2018 there were c.19,000 coworking spaces around the globe, more than twice as many as in 2015. The rate of growth has been nothing short of phenomenal and it shows no sign of slowing.
Onwards and upwards
Experts at GCUC predict that there will be more than 30,000 coworking spaces globally by 2022. This represents 72% growth since 2018. The upward trend continues at pace and it is predicted that 30% of corporate real estate will be flexible office space by 2030.
What are some of the underlying reasons for this growth trend and where are we seeing the greatest impact?
Four key drivers fuelling global coworking growth
1. Big corporations are moving into coworking space
Flexibility and agility are two important facets of modern workspaces that large corporations crave. This is leading more corporations to take coworking space. It’s expected that this trend will accelerate across the next five years with corporations looking to reduce their exposure to long term leases and employees demanding more options in the workplace.
2. Coworking space continues to attract start-ups
Start-ups appreciate the advantages for cost, talent and flexibility that coworking spaces provide. Coworking remains the natural, logical choice for start-ups.
3. Self-employed workers growing worldwide
Whilst estimates of the absolute number of self-employed workers across the globe are imprecise, observers acknowledge that their numbers are large and growing. Independent workers appreciate the value and benefits of modern coworking spaces and continue to drive demand.
4. Specialist spaces are expanding the coworking market
Workspaces with specialist appeal are also growing rapidly. Spaces with specialist appeal such as shared biolabs, industry specific, female-oriented spaces and shared commercial kitchens are fulfilling a need and increasing in number.
Where in the world…
In 2017 over a third of global coworking space could be found in the Asia/Pacific & India region. This region is forecasted to continue to grow rapidly through to 2022. It is predicted that China will become the world’s largest coworking market by 2022, with India emerging alongside it as one of the world’s largest coworking locations.
The “Rest of the World” represented just 13% of global coworking space in 2017, but these regions are predicted to experience rapid growth, particularly across South and Central America, Eastern Europe and Russia and parts of Africa.
The USA is still by far the country with the most coworking spaces with a similar share to that of the whole of Europe. Markets in the USA and Europe by comparison are relatively mature and are predicted to grow more slowly than the overall global rate.
USA in focus
The USA remains the world’s largest single market for flexible workspace with an estimated 80 million square feet of space. This compares to around 60 million square feet in the UK. Coworking giants WeWork and Regus are reported to manage 23 million square feet in the US between them.
New York is the coworking capital of the US with over 330 coworking centres. By the end of 2018 flexible and coworking operators occupied 9.2 million square feet in the Manhattan office market.
Demand in New York is very strong and there is huge potential for growth, as flexible office space represents just 2.5% of Manhattan’s office occupancy. The growth in demand within the coworking sector is being fuelled not only by freelancers and start-ups, but by large corporations utilising flexible space to expand their business.
The 1 Million Club USA
Here are the 10 leading US markets, each with over 1 million square feet of coworking space.
Manhattan is by far the largest market for coworking space in the USA with LA the only other location providing over 3M square feet of coworking space. LA, San Francisco and Chicago have witnessed more than 15% year on year growth in coworking spaces (2018 vs 2017) and now have more than 566 coworking centres between them.
Countries across the world are following America’s lead and the global coworking phenomenon shows no signs of slowing anytime soon.
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