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Coworking spaces are shared offices where staff members can interact, collaborate, and share resources under one roof. The coworking market consists of all the coworking business players who are invested in the flexible workspace style and are promoting the idea of contemporary coworking to the new generation of workers to engage and indulge in the concept of managed workforces.
The market for shared workspaces makes it possible for coworkers to communicate ideas and carry out day-to-day tasks without being constrained by organizational regulations.
The Coworking Space market has been growing rapidly in recent years, with a projected global market size of USD 50,150 million by 2028, and an anticipated Compound Annual Growth Rate (CAGR) of 9.6% during 2023-2028.
This article will include both qualitative and quantitative data on the coworking space market, including an overview, domestic and global perspectives on coworking markets, market dynamics, and more. Read on to discover more.
A Peek into the Current Coworking Situation
Due to the growth of startups, remote work, and freelancing, the coworking concept has been expanding its appeal on a global scale recently. The market for coworking spaces is fueled by a number of trends, such as the expansion of remote employment, the emergence of the startup culture, and a rising need for flexible office space.
For companies wishing to cut office space costs and boost flexibility, coworking facilities provide an affordable solution. New trends emerge year-on-year in the coworking business, the industry is highly dynamic and ever-changing.
In fact, another recent trend that has emerged is the adoption of technology in coworking to make things automated such as mobile applications and digital tools to improve user experience and save time.
Coworking space aggregators like Stylework stand out on that front with their niche B2B product suite, CPS (Corporate Product Suite) and hub and spoke model that provide a greater hold on things with efficiency and effectiveness.
Through our intuitive and user-friendly corporate product suite businesses can manage hub and spoke models and minimum guarantee seat models seamlessly by providing end-to-end solutions including employee tracking, managing the billing cycle, scheduling visits without geographical constraints, and much more.
Now, Let’s Discuss Statistics!
The following estimates will give you a good understanding of the coworking market’s current state and its continued growth:
- As per industry estimates, the demand for co-working spaces is already 80-90% of pre-COVID-19 levels.
- According to a CII estimate, the coworking market will double in size over the next five years at a 15% CAGR.
- Larger businesses are still waiting it out, with occupancy levels at best at 35%. It is anticipated that there will be close to 20,000 coworking spaces worldwide this year and more than 40,000 by 2024.
Although coworking spaces have many benefits, there are also some drawbacks, such as maintaining high standards of quality and services, luring and keeping a broad clientele, etc. Some places have a shortage of high-quality spaces, and traditional offices compete with them.
Indian Perspective on the Coworking Market
The Indian government is supporting the flex space industry because it sees it as a means of fostering entrepreneurship and creativity in the nation. To promote the sector’s expansion, the government has given tax exemptions and other incentives to owners of flexible space.
Coworking players in India are more aware of some of the most recent trends in India’s co-working or flex space industry that are creating hype such as – the “work from anywhere” movement, the expansion of the “micro-office” market, and the growing emphasis on sustainability.
Coworking spaces are gaining popularity among businesses in India, with demand doubling in the past four years. In Q1 2023, coworking spaces represented a 27% share of the net absorption of 8.2 million sq. ft. across the top seven cities (Mumbai, Delhi, Hyderabad, Ahmedabad, Bengaluru, Pune, Chennai).
By 2028, the coworking market in India is projected to grow to $3.5 billion, according to Grand View Research. The startup sector is expanding quickly, but the IT and technology sectors are still India’s greatest users of flexible space, based on the Indian viewpoint.
This is because more and more businesses are searching for flexible workplaces that let them expand or contract as necessary. Finally, it is anticipated that coworking spaces in India will expand between 2022 and 2028 at a CAGR of 15%.
- High net office absorption has been observed in southern cities like Bengaluru, Hyderabad, and Chennai, with coworking companies making up 26% of the total.
- Significant coworking growth has also been observed in Western regions like the Mumbai Metropolitan Region and Pune, where coworking companies account for 24% of net office absorption.
- Coworking companies accounted for 32% of the office space occupied in the National Capital Region (NCR) in Q1 2023, further demonstrating their rising popularity.
- Kolkata witnessed a moderate amount of coworking adoption, with coworking companies occupying 12% of the office space taken in in the first quarter of 2023.
Global Perspective on the Coworking Market
Globally, employment patterns have shifted, with a current emphasis on flexibility, hybridity, and customization. The global perspective holds that modern workspaces have replaced more conventional ones, which has increased labor productivity.
Traditional 9-to-5 workplaces are fast becoming a thing of the past as we navigate the post-COVID era. Coworking spaces are becoming a popular workplace option, providing excellent value to companies.
North America, Europe, Asia-Pacific, Middle East, Africa, and the rest of the world are some of the regions that make up the Coworking Space market segments.
The biggest market for coworking spaces is in North America, The flex space in the United States alone is expected to reach $34.99 billion by 2027, growing at a CAGR of 16.4% from 2022 to 2027.
However, the Asia-Pacific region is expected to be the fastest-growing market in coworking with a CAGR of 12.4% from 2023 to 2028. The global Coworking Space market size was valued at USD 12359.0 million in 2021 and is expected to expand at a CAGR of 17.28 percent during the forecast period, reaching USD 32167.0 million by 2027.
The Great Resignation is evidence that working professionals desire a positive work environment. In reality, 70% of professionals want to work in an environment that supports their career objectives.
Professionals have many options for career progress since coworking provides a collaborative workspace. The worldwide coworking space industry, which exhibits encouraging growth and a plethora of opportunities for a wide range of businesses, is one emerging contributor to this trend.
According to the global perspective, the rising acceptance of hybrid work arrangements around the globe, which let employees work from home occasionally and in the office other days, is already being adopted by many businesses.
As they can offer a comfortable and flexible office that is close to home, coworking spaces can be a wonderful alternative for firms that wish to give their employees a hybrid work environment. The WeWork Global Workplace Report 2022 found that 70% of businesses are now considering or planning to adopt a hybrid work model.
Final Thoughts
This article gives businesses the information they need to comprehend the Coworking Space market’s landscape and gain a competitive edge by making informed choices. Overall, the coworking space market is a vibrant, developing sector with a lot of room for expansion and innovation.
It will be interesting to watch how market participants adjust and set themselves apart to stay ahead of the competition as the market continues to mature.
The global coworking market is expected to reach $50.15 billion by 2028, growing at a CAGR of 9.6% from 2023 to 2028. Some of the key factors driving this expansion are the demand for flexible office spaces, cost reductions for small firms and startups, and the rise in entrepreneurship and freelancing.