Last year, 2 188 new coworking hubs opened around the world. That’s one every four hours according to the 2019 Global Coworking Growth Study by Coworking Resources, which projects that the number of spaces worldwide will reach 25 968 by 2022. In 2018, South Africa accounted for around 76 coworking hubs, most of them in Cape Town, Johannesburg and Durban. “As the market is getting saturated, newcomers are using lifestyle perks such as free drinks, foosball tables, and back massages to get tenants to sign up. While there is a demand for those types of set-ups, not everyone is after operating from a pseudo lifestyle centre,” says David Seinker, CEO and founder of The Business Exchange. “Some coworking hubs have so many desks they become noisy and disruptive, pushing tenants back to coffee shops and their home offices.” This defies one of the key purposes of shared office spaces: to connect individual business owners and entrepreneurs, foster collaboration, and help entrepreneurs build their businesses. Seinker says that The Business Exchange is getting more and more enquiries from potential tenants that specifically revolve around the “availability of professional, business-nurturing working spaces without the riff-raff”. Besides boardrooms, super-fast WiFi, teleconferencing facilities and other business necessities, The Business Exchange’s branches in Rosebank, Sandton and Morningside also offer communal spaces where tenants can unwind. The company hosts events that bring its tenants together to help their businesses thrive and build a community of like-minded individuals. Seinker believes that is why high-growth start-ups such as digital marketing firm NonZero Agency as well as multinationals like Etihad Airways, Bidvest, and Doha Bank have chosen The Business Exchange to establish their local and regional branches.
Challenging leasing environment
Location is key. WeWork is opening its first African shared space in Redefine Properties’ new 15-storey Rosebank Link at 173 Oxford Road, Rosebank. The global community company with operations in over 400 locations across 100 cities will lease six floors. Other tenants include Covington SA, Jellyfish, Value Capital, GMG and the unicorn of coworking spaces. “As we continue our growth, we are also committed to sharing the upside with our landlord partners, so are especially pleased to be partnering with Redefine Properties in a revenue-share agreement that allows both parties to benefit from the revenue WeWork’s presence in the building will generate,” says Patrick Nelson, head of real estate for WeWork EMEA. The new tower has an estimated gross lettable area of just over 18 000sqm of office space with approximately 817sqm of retail on the ground floor. Its location allows safe and direct access to the Rosebank Gautrain station. “The highly successful letting of Rosebank Link makes us extremely proud. It underscores the fact that despite a challenging leasing environment, the combination of a top quality asset and unique location will always attract premium tenants,” says Pieter Strydom, commercial asset manager, Redefine Properties.
Meanwhile in Cape Town, landlords and tenants are creating coworking spaces to cater for demand. Retailers are creating coffee shops, meeting places and shared retail spaces within their stores while hotels are offering office and conference facilities. On-demand spaces are being established in vacant commercial and industrial buildings or shopping centres. Not always located in traditional areas, even the South Peninsula now has the first full-service coworking space in the form of The Loft Collection. It is a trendy business hub in Sunnydale, near Noordhoek, and offers workspaces, meeting facilities, high-speed internet and more. However you look at it, future proofing building design and construction to embrace coworking spaces makes perfect sense, say the Seeff False Bay commercial team.