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Coworking Spaces

The 2018 State of Coworking Spaces

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42% of coworking spaces are profitable

42% of coworking spaces are now profitable (+1pp). The profitability increases enormously depending on the number of members. 80% of coworking spaces with 200 or more members generate a profit. Nevertheless, the generally low levels of profitability are not only due to the consistent high share of young coworking spaces that have opened only recently.

The majority of all coworking spaces continue to be operated on the side!

Nearly two-thirds of all coworking spaces are still a side business for their founders and owners. A coworking space can pay off for them in many ways, for example, it can lower the rent costs for the main business, strengthen competitiveness as work is done in collaborative workspaces, or create a more representative and productive work environment that would otherwise not be possible for the parent company. In these cases, a coworking space is often successful enough as long as it is not making a loss. More than one in four part-time operators say coworking spaces do not need to make a profit as part of their whole business. Among full-time operators, this stands at only one in ten.

Individual coworking spaces belonging to chains also don’t necessarily have to be profitable

If a company operates ten or more coworking spaces, individual coworking spaces also have to more seldom make profit in order to run the overall business economically. Any eventual losses are borne by the whole company. This probably indicates a trend, similar to practices in the hotel industry for example, where chains operate networks that are attractive when viewed as a whole. They willingly open hotels in less profitable locations rather than lose customers by not being present at all. It’s also possible that they, for the time being, burn money in order to expand their market position.

Coworking spaces are not just limited to very big cities

40% of coworking spaces are located in cities with at least one million residents, just as many as in the two previous years. For the first time, there are on average 50 coworking spaces found here! An increased share of coworking spaces is now situated however in cities with between 100,000 and one million inhabitants.

In contrast, the percentage of coworking spaces in smaller cities of less than 100,000 people fell slightly for the first time since 2010 to a quarter of coworking spaces worldwide. Located in such cities, they usually have no more than one other competitor – given that a coworking space exists at all.

Market saturation is only increasing in very large cities – but it is far from worrying

The evaluation also shows corresponding differences when market saturation is considered. A quarter of coworking spaces in cities with more than 500,000 inhabitants said there are too many spaces. This statistic drops rapidly in cities with fewer residents.

Generally, the feeling of having ‘too many coworking spaces’ increases with the number of coworking spaces in one place. However, even including extreme numbers, this thought is not shared by the majority.  

Globally, results have remained stable compared to the previous year. Almost 60% believe that saturation is ‘just right’, whilst 22% think there are ‘too few coworking spaces’.

The most common reason for moving: rooms are too small

Coworking spaces named the (rising) price of real estate as their second biggest problem. One in eight (!) spaces moved within the last twelve months prior to the survey. Most commonly however, this was because their location was too small (63%) rather than due to rent prices of the old location (36%).

Relocation now mostly effects coworking spaces which are located in medium-sized towns and suburban areas. The rate of relocation is lowest in megacities.

Rental contracts generally run for five years

As a rule, coworking spaces sign a five-year rental contract. Generally, the more built up and bigger the city in which the coworking space is located, the longer the lease. It also increases with the age, size of the space, and number of coworking spaces owned. The bigger and older the coworking space, and the more offices owned, the longer the lease.  

On the whole, coworking spaces rate their relationship with their landlords highly (76%). However, satisfaction decreases with the shortening amount of remaining time on the lease, as well as with the increasing age of a coworking space.

Management contracts for coworking spaces are generally shorter than leases. Although shorter, they rate their relationship with their real estate owner more highly. Coworking spaces who are part of a joint venture with a real estate owner enjoy even more harmonious relations.

Online with almost 160 Mbps  

Every eight coworking space delivers internet speeds of 500 or more megabits per second. The average bandwidth is 157 mbps. Excluding extremes, the fastest internet speeds are found in North America (206) and Europe (171). Bandwidths are generally higher in bigger cities than rural areas. Larger coworking spaces offer faster internet connections than smaller ones.

Coworking spaces provide their members with an average of five wifi access points, or 1.2 per 100 square meters (1.1 per 1000 ft²). Unsurprisingly, larger coworking spaces offer more access points, but their ratio per desk shrinks rapidly by size. In case of total outages of internet, every other coworking space is also covered by an alternative internet provider.

One in two coworking spaces offers barrier-free access

Larger coworking spaces are more likely to offer barrier-free access. They are also more likely to provide around the clock access for their members – although not necessarily in megacities. Round-the-clock memberships are not used by all members as they usually require special contract terms.

40% of coworking spaces allow dogs during the whole working day, a quarter also allow children. 2% of coworking spaces offer childcare.

Not been fed enough stats yet? Here’s one more:

One third of coworking space companies operate more than one location, slightly more than the previous year. Those running more than one operate an average of six coworking spaces. In the next article, we’ll report on the operators themselves and their workforce in coworking spaces.

Download the free report

You can view all general statistics graphically by clicking on the article image or in a higher resolution via this link for free. A more widespread collection with many more results and detailed group comparisons required significantly more time. For this reason, you can receive the ‘Ultimate Coworking Space Data Report’ if you support the ‘Global Coworking Survey’. It is until now, the widest and most comprehensive collection of statistics over coworking spaces available worldwide.

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The Global Coworking Survey focuses on the coworking industry as a whole, from small to big coworking spaces, and covers a wide range of topics. This article has spotlighted the more business aspects of the coworking space market. Here, you can read more about the 2018 Global Coworking Survey

The 2018 Global Coworking Survey is officially supported by the following organizations:

Main Supporters: 
Nexudus Spaces - A management tool for coworking spaces
WUN Systems- A management tool for coworking spaces
Essensys - A management tool for coworking spaces

Distribution partners: 
Coworker.com - A platform to find and book coworking spaces
Social Workplaces - An event organizer and consulting agency for coworking spaces

*Unless stated otherwise, we express average values in 5% trimmed mean for unrestricted scales (e.g. size in square meters, number of desks or members). This means that the lowest and highest 5% of all values are not taken into account. The result is that we can filter the extreme outliers from the average. However, all average values (mean, 5% trimmed mean and median) are contained in the graphics for the results. It is important to note that many statistics presented in the graphics are also grouped, and present their share to reflect the whole reality.

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