by Brianna Crandall — November 22, 2019 — Global real estate services firm Cushman & Wakefield (C&W) recently released a report that reveals corporate perceptions of the value of flexible workspace and coworking strategies.
Cushman & Wakefield partnered with CoreNet Global, a worldwide association of corporate real estate (CRE) executives, to survey more than 550 key CRE executives at organizations around the world throughout 2018 and 2019. Participants were asked about their general perceptions of the coworking sector, the pros and cons of using coworking spaces, expected impacts on cost, and past and future employee utilization of flexible office spaces.
The study’s main conclusion was that the majority of CRE professionals believe in coworking and expect it to be a growing trend, with nearly two-thirds of the companies surveyed expressing a positive or very positive view of coworking.
Across all global regions, the top two benefits are flexibility (i.e., the ability to quickly ramp portfolio up/down) and reduced real estate costs, according to the report.
Tim Venable, senior vice president at CoreNet Global, remarked:
We’ve seen coworking grow dramatically over the last several years, and we expect that to continue. The sector will face issues including maximizing cost efficiency and maintaining a corporate culture across many locations. As that happens, coworking will continue to be a major force shaping corporate real estate.
Digital security is the most commonly cited potential downside in each region but is much more salient in the EMEA region (Europe, the Middle East and Africa), with 70% of respondents selecting this as a concern (vs. 54% of Americas and APAC [Asia Pacific] respondents). Approximately half of all respondents indicate decreased company culture and cohesion and personal privacy are the main downsides of coworking.
Key findings of the report include:
Nearly two-thirds of companies utilize coworking to some degree in their portfolio, and many respondents expect to double their commitment to coworking over the next five years.
“The results show that corporate leaders have a generally positive view of coworking and see flexible space as a growing part of their occupancy strategy,” said David C. Smith, Americas head of Occupier Research at Cushman & Wakefield. “The percentage of employees with access to flex space is on the rise, and companies increasingly see this as part of a broader solution.”
One-third of companies using flexible space report occupancy cost savings of more than 5%.
“While this may surprise some, even 20 years ago, the client mix of national and global flexible workplace providers was 51% multinational corporations,” said Melanie Gladwell, vice president, Americas head of Flexible Working Solutions at Cushman & Wakefield. “Increasingly, corporate executives recognize that integrating flexible space into their strategy can provide additional value while reducing occupancy costs by enabling them to adapt to major events such as merger activity — 63% of companies have stated they are using coworking as part of their office strategy.”
Despite an overall positive view of coworking, CRE executives are realistic about the challenges for the workforce.
Approximately half (48%) of respondents see an increased difficulty in maintaining company culture and cohesion when workers are operating out of a shared coworking location. In addition, a similar number of respondents cited digital security as a potential concern. It is worth noting that despite stated concerns from CRE executives, national and global flexible workplace providers have a long track record of providing clients with access to necessary digital security mechanisms and offer FINRA compliant offices. Additionally, companies are 50% more likely to indicate coworking is an opportunity to increase employee satisfaction than it is a likely deterrent to employee engagement, job satisfaction or efficiency.
The full CRE Executive Perspectives on Coworking Topical Report is available for free download from the Cushman & Wakefield website with a brief registration. Cushman & Wakefield serves real estate occupiers and owners through property, facilities and project management; leasing; capital markets; valuation and other services, with 48,000 employees in approximately 400 offices and 70 countries.