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Home / Brand Insight
Brand Insight
Barfoot and Thompson

Co-working new office trend in NZ

12 Jul, 2017 05:00 PM5 minutes to read
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The early 21st century could be labelled "a selfish era" but, oddly, sharing things is quietly on the rise.

Dine with millennials at any modern restaurant and the chances are you'll be encouraged to share tasty dishes with the rest of the table.

Citizens of cities right around the world now share bicycles; shared cars are said to be next on the personal transportation list and in Auckland the number of shared - or co-working - offices is exploding.

"Last year Kiwi co-working offices totalled about 13,900 square metres but by the end of this year that's likely to triple," says Barfoot and Thompson commercial leasing specialist Lorne Somerville.

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"The range of folk using co-working offices is wider than most people realise - from sole traders right through to our largest corporates."

He says leases may be long or short, spaces used may range from a single desk to 100 desks or more, and layout can comprise classic walled offices though to vast open-plan designs.

"But the one thing all co-working offices strive to deliver is a caring, efficient and even funky environment," he says, "one where you get to know the other people in the building.

"The plan is to give the workplace the community feel so many employees now crave; the idea is
to enjoy time at work, feel more engaged and be happier to extend their time at the office."

Somerville says excellent wifi, meeting rooms, a cafe (or at the very least great coffee), plus modern decor has become more or less de rigueur in co-working offices.

"Beyond all that, the co-working companies strive to curate an environment designed to enhance creativity and productivity. The expectation is that employees will be able to mix with, and be stimulated by others, working in the building.

"Already a lot of networking and business opportunities are flowing from that approach. Co-working space providers are more than mere landlords; they're very careful about who they place alongside one another in their buildings.

Somerville says some providers effectively take over the role of the classic HR department to iron out issues, arrange guest speakers, development programmes, fun activities after hours, "but in every case the drive is to provide a true community vibe at work."

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Somerville sees demand for such working environments rapidly escalating: "In Auckland during 2016/2017, more than 25,000sq m of additional co-working space is being delivered by the four main players in the industry."

They are Smales Farm, Northcote, 11,000sq m; Generator, Viaduct, 6700sq m; BizDojo, (Takapuna, Parnell and Ponsonby), 5700sq m; and Regus/Spaces, 3000sq m (at the airport, Mairangi Bay and Ponsonby).

"They appeal to a wide audience, beginning with the previously home-based freelancer or out-of-town business person needing just a single work station, right through to large corporates such as Fonterra and Air New Zealand. Such corporates have been known to locate entire company divisions in co-working offices, to improve the creative vibe," says Somerville.

Working from home can be difficult due to either a feeling of isolation or the potential for distractions and interruptions there: radio, TV, social media, food, housework and often even our children. Remember Professor Robert Kelly, the academic and accidental Youtube star, whose live TV interview on the BBC got "photo bombed", by toddlers and a wife rushing into his home office?

Kelly's viral video underlined the potential for distractions on the home front but frustrated freelancers working from home are only a small part of the co-working picture.

Small to medium-sized companies enjoy the flexibility of co-working leases, which need not be long-term and may even be month-to-month if required.

Somerville says this provides opportunity for SMEs to respond to growth, potentially adding space for staff or to meet the need to restructure and downsize staff at the work site. In fact, the demand for office space in Auckland - whether conventional or co-working - seems to be burgeoning due to population pressures.

Barfoot and Thompson commercial manager John Urlich points out that Auckland's
population sits at over 1.6 million people: "In 1996, our population was 1.1m so in 20 years has grown by the size of the entire Wellington region after taking 51 per cent of New Zealand's total growth," he says. "Auckland is now home to 34.4 per cent of New Zealand's population."

All this growth will require more office space; strong employment growth in key office sectors suggests ongoing demand for additional space in the short-term, says Urlich.

The number of people employed in key office-occupying sectors has increased by over 36,000 people over the last five years. However, over the next two years, the amount of vacant space is expected to increase as a number of new office developments and refurbishments are completed, adding more than 82,000sq m of space.

So how much of this office space will be the new co-working variety? According to Barfoot and Thompson: much more than ever envisaged.

The imponderable, according to Somerville, is the international workspace giant Wework, a huge company with a current valuation of about $US16b.

"Wework is rapidly expanding into South East Asia and Australia and, at this point, nobody really knows whether it has also plans to also expand into Auckland.

"It's possible established workspace providers here can expand sufficiently in Auckland to make it no longer worthwhile for Wework to establish here - effectively a Trade Me/eBay situation. Only time will tell."

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