Hub Australia chief property operator John Preece says parallels are increasingly being drawn between co-working and the hotel industry, with amenity and service the key differentiators between operators.
He says that not all coworking operators provide the same standard of service. Just like you wouldn’t expect the experience of staying at a motel in the suburbs to be the same as a five-star hotel, there are different standards of coworking.
And he says the Australian coworking outfit is “punching towards the upper end” of this spectrum for two reasons: because it’s an attractive point of difference, and because he believes a higher quality offering will be more sustainable in the long
“If there’s a downturn in the economy, there will be a flight to quality,” he says.
He says that the priority is curating high-quality spaces that will withstand the test of time rather than growing the company’s floorspace as quickly as possible.
For the company, this means curating a “better quality physical environment” by going after buildings with heritage and character that have ample natural light.
The company also opts for larger floor plates (3500 square metres to 5000 sqm) to provide the services that members have come to expect, such as gyms, wellness spaces and parent facilities. Being close to public transport is also a priority.
The intention is to keep growing its footprint, albeit sustainably, by around 10,000 square metres a year. The company is aiming for 10,000 members by 2021.
The company already has a strong presence in the eastern capital cities with over 1000 desks each in Sydney and Melbourne (and more expected next year as new locations open) and 550 at the recently opened Brisbane location in Anzac Square. Preece says the company will focus on growing its presence in the Canberra and Adelaide markets in the next few years.
Preece says as the industry has matured, larger footprints in more central locations are now favoured over “fringe locations.” Again, this comes back to providing the level of amenity and service that members are starting to expect.
Coworking is more than a tech platform, it’s about people
Many small companies are attracted to the coworking environment because it enables creativity and can make it easier to collaborate with other innovative companies.
Hub Australia members can connect and interact with people through the Office RnD coworking management software platform. However, Preece says fostering a genuinely collaborative environment is about more than just a technology platform.
“I’ve heard some [coworking companies] say they are tech companies, but we’re not a tech platform. If we were just a tech platform curating communities we’d be dead.
“We have real people in our clubhouses talking to real people.”
To achieve this community feel, it hosts a variety of events, including social gatherings and professional development events geared at start ups.
The company also sees itself as more than just a provider of real estate and works closely with its members, even encouraging them to connect with and leverage the skill sets of other members where appropriate.
Balance is key to maintaining a community feel
Increasingly, corporates are using coworking spaces to supplement their existing real estate strategies. Preece says at this stage, it is largely the flexibility that attracts corporate clients.
“It’s overflow. It can be project space. We did have one of the banks taking up a lot of desks because they had a project, and when they scaled back and went back into their normal headquarters.”
He says the operator is “not actively targeting” corporate clients because “if one guy becomes big in one location you affect the community feel you are trying to create.” The company will often try and accommodate these clients by providing them with their own private space, he says.
Coworking is inherently sustainable
Coworking is inherently low waste because tenants come and go without changing the fit out. In contrast, there is “very little if any reuse” of office workstations and furniture in the traditional commercial real estate industry.
The model also leads to more “intensive use of existing building stock” because you’re putting more people in the space. Although the cooling and heating requirements do increase with more people, he says it’s still more energy efficient than “running the air conditioner for a few people”.
As a company, Preece says sustainability is a priority. He says this is partly driven internally because “we want to do a bit more than just run a successful business”. Preece says it’s also because some members expect it. “There are some that do [care a lot about sustainability] and there are some that care less.”
Sustainable initiatives include cafes that recycle coffee grounds and eco-friendly cleaning services.