Spaces for flexible office growth

The opening of Spaces Wentworth at Charter Hall’s Raine Square is the latest in a series of growth initiatives in Perth’s flexible office market.

Demand for adjustable leasing options, lower-cost accommodation, technological innovation and an uncertain economic outlook are driving rapid growth for flexible office providers in Perth’s CBD.

Global provider Spaces is the most recent to launch a new facility in Perth, opening its doors at Spaces The Wentworth at Charter Hall’s newly redeveloped Raine Square precinct earlier this month.

Spaces, part of the global office provider IWG that comprises five flexible workplace brands, including long-time player Regus, will soon be followed by New York-headquartered WeWork, which is on track to open two facilities in Perth by the end of the year.

IWG Australia country head Damien Sheehan told Business News that flexible office options were rapidly becoming mainstream, with the section of the office market traditionally populated by startups and small businesses now attracting major corporate interest.

“Just in the past six months alone the market has changed,” Mr Sheehan said.

“Landlords are now looking at us as being an integral part of the success of a building.

“In the past, a big corporate would sign up for 10 years for 500 people.

“Now, they don’t know with technology disruption whether they’re going to need 700 or 200.

“They still may have a really strong business, so they need us in the building to flex up and down.

“It’s an employee-led movement, so employers have to be dynamic and have to look at this solution.”

Spaces Australia-Pacific brand manager Margot van der Poel said much of the demand was coming from the younger generation of workers, which was increasingly seeking flexible office accommodation as a lifestyle choice.

Ms van der Poel said IWG each year conducted a global workspace survey, which found more than 80 per cent of respondents said that if they were presented with two similar employment offers, they would reject the one that didn’t include flexible working.

The survey also showed 71 per cent of businesses in Australia had a flexible workspace policy.

At Spaces Wentworth, Ms van der Poel said the company’s design team had carefully selected its furnishings and fitouts to attract younger workers.

“It’s a type of working that a lot of people these days are after,” she said.

“If you want to attract tenants, you have to have an environment that is productive and inspires people to come to work, and as a business, that’s becoming more and more important.

“Because we work off laptops and we have our devices with us, we have that power of changing what a workday looks like.”

Ms van der Poel said the community aspect of flexible office facilities was also a key attractor.

“It is interesting to see that businesses want to be around other businesses,” she said.

“We have a very interesting setup with Microsoft in their headquarters in the Netherlands.

“They have asked us to run the co-working space on the top three floors of their building because they want to be with other businesses, they want to know what is going on in the world.

“Locking yourself up on a floor with no one around you is not going to stimulate that energy and growth.”

Elsewhere in Perth, locally-headquartered Spacecubed is also experiencing rapid growth.

Documents lodged with the Australian Securities and Investments Commission showed Spacecubed’s revenue more than doubled, from $1.5 million to $3.4 million from 2016-17 to 2017-18.

Spacecubed has a lofty goal for its facilities, which are tailored towards specific industries, aspiring to support 100,000 entrepreneurs by 2025.

Last year, Liberty Executive Offices more than doubled its portfolio of space in Perth, while Melbourne-headquartered Victory Offices also landed in the city.

Ms van der Poel said Spaces would wait until its Raine Square facility was at capacity before committing to another facility in Perth, but said an expansion was already being considered.

“We are building a network worldwide, but we are also building a network within cities,” she said.

“Creating a network within a city is something we like to do; if I look at Perth I see a lot of potential for more Spaces facilities.”