Why Are More Companies Using Serviced Offices & Coworking Spaces?

Why Are More Companies Using Serviced Offices & Coworking Spaces?

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With their flexibility, cost effectiveness and collaborative environment, it’s no surprise that coworking spaces have seen significant expansion over recent years. Pre-2020, these large open-plan offices were often seen as the domain of entrepreneurs, providing startups with all the operational necessities without the hassle, allowing them to focus their efforts on their business. But coworking has been evolving dramatically, with an increasing focus on private serviced office suites in addition to the ubiquitous hotdesks. With global behemoths such as Standard Chartered, Microsoft, Spotify, AirBnB and IBM all having recently entered the world of coworking, we take a look at some of the most frequently cited reasons for them making the switch:

1. Cost Efficiency

No big surprise here. In today’s challenging business environment, the dramatic savings accrued by sharing amenities and resources have become increasingly appealing to companies looking to cut costs. Examples of reduced overheads for businesses include reception staff, cleaning and maintenance, IT infrastructure, utility bills and pantry amenities. Not only does this help SMEs, but large companies such as Spotify and even Microsoft have cited the significant cost savings as a major factor in their decisions to utilise coworking spaces.

2. Scalability

Whether you are streamlining your workforce or bringing on an extra team for a short-term project, coworking’s ability to allow their clients to expand or reduce the amount of space they take can be of huge benefit to even established companies. Thanks to the nature of the industry, there are usually additional desks that can be rented nearby the main serviced office on short notice, and a plethora of meeting rooms and conference areas to rent on a need-to-use basis.

3. Flexibility                 

With office rental markets in flux, companies are nervous about committing to traditional long-term contracts. Most serviced offices within coworking spaces provide short-term agreements of 12 months, with some even offering 6 month solutions. This helps companies reduce the risks associated with expansion. AirBnB have talked about how they utilised coworking to establish temporary offices in various locations as part of their aggressive market entry strategy. Many companies also want to provide greater flexibility to their employees, allowing them to work from a wider choice of locations and office hours. What started as a necessity during the pandemic has since become a frequently requested expectation.

4. Prime Locations

Renting an office in a central business district can be exorbitant, especially in cities with limited real estate like Hong Kong. Coworking spaces are often located in prime areas which might otherwise be unaffordable by a private lease, making them convenient for both employees and clients. Factors such as proximity to customers, public transport, parking and nearby amenities are important. An office within easy walking distance of restaurants, cafes and gyms is also always appreciated by a busy team, as is the ease of giving directions to clients. Taking a serviced office within a coworking space is a great way for companies to retain a prime business address without the associated cost.

 5. Move-In Ready          

Forget the time and expense that is traditionally associated with moving offices – the painting and renovating, deep cleaning, furnishing, equipment renting, pantry stocking, etc. By renting an office in a coworking space, all a company needs to do is move in and get down to work. It helps if the space feels stylistically in harmony with the company values and culture, but with so many different coworking spaces available, this is easier than you might think. Depending on the size of the private office and the terms of the contract, it may also be possible to personalise the space with brand colours and artwork.

 6. No-Fuss Operations  

From running out of coffee to dealing with maintenance issues, leasing a traditional office is always going to be a headache for someone on the team. Using a serviced office means irksome operations are all taken care of, allowing everyone to focus their efforts on their business. Depending on the service provider, companies may also benefit from additional support from the in-house team, such as IT support, or enhanced corporate culture benefits such as automatic enrollment in ESG initiatives.

7. Collaboration Opportunities

It’s not just startups that benefit from the networking and collaboration opportunities that coworking spaces are renowned for. The importance of proximity to innovation hubs and potential partners are frequently given as reasons for the use of coworking spaces. In fact, several major companies have set up partnerships with several coworking operators specifically to tap into this benefit, including HSBC, Amazon and Google.

Keywords: Commercial Office Rental, Co Working, Serviced Offices, Hong Kong Office Rental

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