Co-working boost for the suburbs

Co-working is expanding from the CBD to the suburbs and providing a major economic boost along the way.

Global flexible office provider IWG, owner of the Regus and Spaces brands, is eyeing new suburban and regional locations in Western Australia, seeking to capitalise on a growing trend of office decentralisation and changing work habits.

Independent research commissioned by Regus forecast flexible offices located outside of metropolitan locations would make a significant economic contribution in the next decade, with an individual facility having the potential to inject $16.9 million per year into its local community.

The report analysed the socio-economic impacts of flexible working across 19 countries and was conducted by United Kingdom-based consultancy group Development Economics.

In Australia, the report showed flexible office facilities had the potential to contribute $18.5 billion to local economies over the next 10 years.

The study revealed a shift in jobs and capital growth moving outside of city centres and into suburban locations, a trend IWG is seeking to leverage using its Regus brand of flexible office.

Regus operates 82 flexible office facilities in Australia, with more than half situated in suburban locations.

IWG Australia country head Damien Sheehan said the group was seeking opportunities to increase its suburban presence in Perth from its two Regus facilities, while also considering franchising opportunities in regional locations.

“Potential future markets that we’ve discussed with the team include Fremantle, Joondalup and Rivervale,” Mr Sheehan told Business News.

“In regional towns and cities there are some possibilities, particularly for the right franchising partner, in towns such as Geraldton, Busselton, Bunbury and Albany.

“A lot of this plays into what local councils and business chambers are trying to do.”

Mr Sheehan said companies large and small were starting to realise benefits of a decentralised office base, which other than the economic impacts include shorter commutes and productivity boosts.

“Because people don’t have to travel as far, their commute times are less and they are more engaged,” Mr Sheehan said.

“They are more productive and therefore happier.”

Mr Sheehan said another significant benefit for employers embracing a flexible office network was deepening the potential talent pool for prospective employees.

“In the past, if your business was domiciled or headquartered in the CBD of any city, then typically you’re only able to access people that live close by and want to commute in,” Mr Sheehan said.

“What flexible offices in the suburbs does is open up a huge range of talent options for businesses, because with all of the various technology platforms that are available it doesn’t matter if you are sitting on your porch in the sunshine working, or whether you are sitting in the CBD in the office.

“The biggest thing that we provide is the network.

“So, you can be a large corporate and offer to an Australian workforce, across all cities, the ability to work from the city or the suburbs.

“That’s where a lot of ASX200 companies are going now.

“Technology is disrupting those businesses, so they are saying to their staff ‘we don’t need as much real estate now, so who is interested in working remotely, and here are your options through IWG, both in the suburbs and in the city’.”

Meanwhile, IWG’s biggest competitor, WeWork, is expected to operate in a more conservative manner in Australia, following the global company withdrawing its New York Stock Exchange listing in late September and the resignation of its chief executive.

WeWork had opened 16 locations across Australia since landing in the country in 2016.

Last month, WeWork revealed it would shed around 20 per cent of its workforce, affecting around 2,400 employees globally.

A spokesperson for WeWork Australia would not confirm how many of its local staff would be affected, and declined to comment on any impacts to its WA operations, which include an 8,000-square metre facility in Central Park and a recently opened 3,414sqm facility at 45 Francis Street.

“In Australia, the WeWork core business is incredibly strong,” the spokesperson said.