Research by JLL predicts that coworking space will fill empty shopping centre units and High Street stores, as the trend for flexible working continues to grow.
JLL forecasts coworking space in retail units in the US will grow at a rate of 25% annually through 2023 and reach approximately 3.4m sq ft. There is currently 60m sq ft of coworking space in conventional office buildings across the US.
The study examined 75 coworking spaces that take up more than 1m sq ft of retail space. The highest concentration of coworking spaces in retail is either in shopping centres (21.3%) or urban locations (20%).
JLL identified 4 different types of coworking space that will attract different kinds and stages of businesses:
- Retail launchpads – specifically target retail startups, featuring retail incubation and demo space
- Telework hubs – the most common of coworking spaces, representing 78% of case studies. These are comprehensive telecommuting locations with a mix of corporate office workers, entrepreneurs and creatives
- Business boosters – a growth vehicle for entrepreneurs and freelancers which offers special business development tools including capital, consulting services, creative support, specialty equipment, classes and mentors
- Creative coalitions – community and workspaces for artists and creatives, with equipment like 3D printers, welders and dark rooms for photographers
Since 2010, the flexible space sector has grown at an average annual rate of 23%, compared to just 1% average annual occupancy growth of the broader US office market.
Scott Homa, director of office research for JLL explained: “We’re forecasting a dramatic shift in office space in the next decade as tenant demand for more flexible space options forces building owners to adapt. We expect this to drive a convergence of office, retail, and hospitality uses into one seamless, integrated tenant experience.”
Holly Rome, director of retail leasing at JLL, advises of the value of investing in coworking: “Setting up a coworking space in a retail property provides workers a fun, yet functional space with great accessibility, ample parking, and value-add amenities like personal services, shopping, and food options. On the flip-side, these tenants bring in daily traffic and have a stable master lease that’s typically 5 to 10 years.”
James Cook, director of retail research for JLL added: “Coworking is no longer a startup only culture. Most flexible space today actually provides dedicated and private areas to larger companies that need to scale their workforce up or down. This wide range of needs has created four distinct coworking spaces that we think will increase in retail, each tailored with different amenities.”