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Co-working spaces: how their flexibility has been their trump card

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Opinion piece: Eric Siesse, Deputy Director-General, Transaction France, BNP Paribas Real Estate

In all sectors, there will be a before and after Covid-19. Our perception of work and how it is structured will certainly be changed. 

Co-working, an alternative type of space that has been in demand in recent years, has found that it’s worth has been solidified. As lockdown was eased, not everyone was able to immediately return to their offices. This meant finding new ways of returning to work. In addition to remote working, co-working and the office will have to be reinvented, offering increasingly functional and safe spaces for their occupants.

A market that remains solid despite the health crisis

Co-working spaces often reflect the state of the economy and trends as they adapt to the current social environment. The democratisation of home working, along with the evolution of new technologies, had already allowed for the growth of these agile and flexible places. In many areas, the health crisis will accelerate already entrenched habits and confirm trends that were already well established. While confinement has caused co-working transaction volumes to fall by around 75% in France, comparable to many other sectors, the fixed date for the end of lockdown, announcement by President Emmanuel Macron led to a doubling of leads. This demand still needs to be transformed, but the potential is there. The coming months should confirm a trend that is already structurally favourable to the sector.

In the short term, the co-working model will prove to be resilient, as short-term contracts represent only 10 to 15% of activity. In Ile-De-France, supply has not yet reached its financial equilibrium and represents around 1% of the customer base, which is relatively low compared to other major cities. This delay can be explained in part by a rise of entrepreneurship within French culture that is slower than that of the Anglo-Saxon model. London at this point remains the European city with the most space dedicated to co-working.

A turnaround in the co-working market is therefore difficult to envisage given the undersupply of offices in Paris (2.2% vacancy rate), the ever-present need for centralisation, and the new needs resulting from the health crisis.
 

A response adapted to the current context

As a result of the current context, the main needs of those using co-working spaces can be divided into three main categories. Firstly, co-working spaces will be "transitional spaces". I am thinking, for example, of companies that have had to wait for their office buildings to be delivered. 

Flexibility is also going to a key motive for co-working. Such spaces were notably flexible before, but the resilience of its model is now being reaffirmed. By disrupting traditional long-term lease options and offering a degree of flexibility to companies following the crisis, it will become a vital lifeline for many. This need will be felt in an economic context as for some players, moving forward with prudence and pragmatism is going to be more important than ever. 

Finally, co-working spaces correspond with the current need to "make space". The gradual return to the office, in strict compliance with health measures, requires many companies to rotate their teams. Remote working is not always optimal for everyone, because the home office does not always offer the comfort, technological tools and services found in the office. Co-working spaces, which bridge the gap between home and office, and have already adapted to such safety measures, allowing some to stay open during the pandemic. 

These sanitary measures are based on different concrete actions, which have already been applied to certain co-working spaces. The spacing out of posts seems inevitable of course, but it will also be necessary to limit social events such as meetings and after work events. It is unfortunately these social occasions that make working in an office pleasurable. However, it will of course be necessary to limit occupancy levels inside and outside of the building. It is also quite possible to offer private spaces in order to allow employees control over their own security. Co-working spaces have adapted before, so they will be best placed to apply these precautionary principles in the future. 

If home working has proven to be successful to some extent during confinement, it is worth recalling that according to an Ifop study commissioned by BNP Paribas Real Estate in April, 28% of people said their experience was more negative than positive. 39% said they were less efficient whilst remote working and 41% missed exchanging with their colleagues. The professional environment is therefore popular, allowing people to share experiences that remote working and videoconferencing cannot replace. Co-working as such can become one of the solutions that respond both to the measures instigated by the government and to people's natural propensity to socialise in a place dedicated to professional activity. As for the office and head office, they will continue to play their role as a marketing opportunity, a hub of decision-making and technology, but also a place for sharing, socialising, inspiration and performance, that co-working will be able complement.