COWORKING IN THE CZECH REPUBLIC SEPTEMBER 2018

RESEARCH

Real Estate for a changing world Coworking is about networking not about physical space. Lukáš Hudeček, Node5

There is space for expansion in every large city in the Czech Republic for a coworking centre, as people are less willing to relocate for work and more and more concerned with work life balance. Lukáš Hudeček, Node5 ST NAD LABEM LIBEREC COWORKING IN THE CZECH REPUBLIC - SEPTEMBER TEPLICE BRANDYS HRADEC CHOMUTOV NAD LABEM KRLOV KOLIN 6 PARDUBICE OSTRAVA OPAVA HAVÍŘOV PLZEŇ ZLATNIKY KARVIN – HODKOVICE OLOMOUC PŘIBOR PRIBRAM PŘEROV NOV IČÍN TABOR HAVLIČKV COWBROD ORKZLN ING ČESK BUDOVICE BRNO 3

80 27,600 m2 350 m2 8 Coworking centres Total size of Average size of Coworking centres run by in the Czech Republic the coworking centres a coworking centre international operators (41% in Prague)

COWORKING IN THE CZECH REPUBLIC

ST NAD 2 2 LABEM TEPLICE 1 LIBEREC HRADEC KRLOV 1 BRANDYS KADAŇ 1 1 NAD LABEM 2 CHOMUTOV 33 3 OSTRAVA 4 OPAVA 1 ZLATNIKY KOLIN PARDUBICE 2 – HODKOVICE 2 HAVÍŘOV 1 2 KARVIN 2 LITOMYL 1 OLOMOUC 6 (9,700 m ) PLZEŇ PŘIBRAM 1 1 PŘIBOR COWORKING CENTRES 1 HAVLIČKŮV + PŘEROV 3 TBOR 1 BROD 1 NOVÝ JIČÍN IN A-CLASS PROPERTIES 1 ZLN 3 2 ČESKÉ 9 74 (17,900 m ) BUDĚOVICE 1 BRNO 1 COWORKING CENTRES IN UHERSK HRADITĚ B, C-CLASS PROPERTIES

Source: BNP Paribas Real Estate, as of September 2018

COWORKING SPACE MEETS THE NEED FOR FLEXIBILITY COMMUNITY SERVICES Small businesses, freelancers and start- Coworking spaces favour communication, Coworking spaces are mostly located in ups can use workspace when they require networking and collaborative work. Com- prime districts, close to transportation it. Coworking spaces offer short-term rent- munity events are organized and reinforce hubs and other amenities. Members are al or membership fees based on hours of the feeling of being part of a community. provided with a fully equipped workspace access so that the businesses save costs. as well as food and drinks which are at These entrepreneurs also may not be able The network is also not bound to physi- disposal in the cafés and kitchenettes for to commit elsewhere to standard long- cal space but also extended to an online the members. Some centres even offer term lease contracts. Large companies community of members including purely the use of the garden, an own chef or may also be a target for coworking oper- virtual memberships. electric cars for members to quickly get ators and benefit from access to talent, to meetings. innovation and the creativity driven en- vironment. Additionally, some corporates may even dedicate some excess space to coworking centres.

3 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER 2018 COWORKING VERSUS SERVICED OFFICES?

COMMUNITY RATHER WHAT LIES BEHIND THAN SPACE THE RISING DEMAND FOR Coworking is COWORKING SPACE? already a buzz word but what MILLENNIALS AND defines space of 2,000 GEN Z AS THE NEW Number of start-ups this nature? WORKFORCE OF TODAY in the Czech Republic1 COWORKING IS A CONCEPT OF AND TOMORROW “WORKING TOGETHER“ AND Millennials and Gen Z require more flexi- USUALLY INVOLVES A SHARED bility, they strive to connect both virtually WORKSPACE WHERE INDEPENDENT as well as in real space and ask for work life balance. All that has transformed the PROFESSIONALS WORK TOGETHER. way we work and coworking centres re- The division between coworking space spond to these needs. and serviced offices becomes blurry as many serviced office suppliers are now presenting coworking as a part of their SHARING ECONOMY offer. Nevertheless, key difference is that Sharing the offices becomes common as coworking centres operate on member- sharing cars and homes via Uber or AirBnB. 340,000 ship fees and their philosophy relies on Number of self-employed – office connected community and network building. While professions2 pure coworking centres offer also cellular DIGITALISATION offices for lease, serviced offices providers Technological advancement and digital- are tapping into the potential the millen- isation allow new flexible forms of em- nial workforce provides with their request ployment away from the fixed desk in the for flexibility and community building that corporate office. Sources: 1. Erste Group is the coworking offer. 2. Ministry of Labour

4 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER

SERVICED OFFICES Spaces offer PROVIDING TAILOR-MADE creative working SOLUTIONS environments There are 22 serviced offices within the Czech Republic, providing 23,000 sq m with a unique of office space operated by the global 22 Number of serviced market leader Regus with 11 buildings offices in the Czech entrepreneurial and a local provider Scott & Weber. Their Republic goal is to ensure that the client does not spirit and we need to take care about anything and provide him with a “tailor-made office”. are happy that Therefore, they offer any services clients need, such as administrative and IT sup- businesses in port, legal and tax counselling, events organisation, catering and dry clean- Prague will be ing. Serviced offices nowadays are also quite flexible with offered lease length, able to join this it is even possible to rent an office for one day. They are targeting mainly busi- unique concept ness clientele. Scott & Weber will open 2 another centre in the office building Pra- 23,000 m of flexible ga Studios on 1,350 sq m next year. Re- Total size of the serviced offices gus that has become part of the IWG is working soon. about to enter the market with another Karel Pelan product line branded Spaces providing Regus Country Manager highly professional coworking spaces di- rectly in the downtown of Prague.

5 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER 2018 EVOLUTION OF COWORKING

THE FIRST COWORKING CEN- The majority of centres is situated in B, operates in Visionary office building in TRE IN THE CZECH REPUBLIC C-class properties (93%). Recently the Holešovice. WAS LAUNCHED IN PRAGUE share of coworking centres in A class Most coworking centres are run by lo- IN 2009. Since then the sector has properties has risen to 7% and others cal entrepreneurs, some of them have undergone significant development and will follow. a wider presence in several locations. rise in the numbers. As of now, we reg- In 2017 Node5 opened a coworking The share of international chains is ris- ister 80 centres in the country. 33 are centre in Ústí nad Labem on 750 sq m. ing swiftly as is the average size with situated in Prague (48% in total size of Beginning 2018 Impact Hub opened in the large international centres being the centres). The coworking phenom- Brno the largest centre in its network in opened. The international chains active enon has also spread to other towns Europe on 3,400 sq m. The Port opened as of September include Impact Hub, in the country, sourcing on the cities’ in Prague Karlín in March 2018. The in- HubHub and BusinessLink, Worklounge skilled labour, student population with ternational chain HubHub launched its aspires to become an international strong technical background and in operation in the summer this year in Na player with expansion planned abroad. cases of smaller cities also lack of suit- Příkopě 14 (2,000 sq m). BusinessLink able office solutions.

THE SECTOR IS SEEING DY- as well as external ones, “community” opening in Albatros Building in Prague NAMIC EVOLUTION as is con- building and with space rental for ex- 1 on 3,500 sq m. WeWork, the largest firmed by recent wave of openings. ternal events. In terms of its member- international coworking operator, is not International coworking brands are ex- ship base start-ups and technology sec- yet present in the Czech Republic but is panding heavily. Another HubHub will tor are a key target along with a fusion looking for suitable premises. Also not be opened in Palác Ara also in the city with the corporate innovation teams. present are MindSpace, TalentGarden centre end of this year. HubHub will fo- or ServCorp, some of the largest inter- International Workspace Group (IWG cus on three pillars within its strategy national chains active in Europe. This – holding company of Regus Spaces providing “programming” – educational year new supply of coworking centres and other coworking brands) will be events, workshops both for members will amount to 11,500 sq m.

6 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER WHERE DO WE CO-WORK?

Coworking spaces and serviced offices in Prague

33 coworking spaces PRAGUE 1 SMCHOV Average size 490 m²

THE MAJORITYZLIČÍN OF COWORKING CENTRES ARE SITUATED IN CENTRAL It is not just about fast LOCATIONS IN PRAGUE, internet, good coffee and Prague 1 hasŘEPORYJE the highest comfortable furniture number of centres, followed by anymore, it is about and . Some feeling good in the centres also emerged in outer city locations and even smaller coworking space. municipalities around Prague. Petr Šedivý, Impact Hub Most of the regional and large district capitals also have PRAGUE seen the emergence of newPRAGUE 16 coworking centres lately.

Source: BNP Paribas Real Estate

ST NAD LABEM LIBEREC 20 serviced offices TEPLICE BRANDYS HRADEC Average size 1,100 m² CHOMUTOV NAD LABEM KRLOV PRAGUE KOLIN 6 PARDUBICE OSTRAVA OPAVA HAVÍŘOV PLZEŇ ZLATNIKY KARVIN – HODKOVICE OLOMOUC PŘIBOR PRIBRAM PŘEROV NOV IČÍN TABOR HAVLIČKV There is strong demand BROD ZLN for coworking spaces in ČESK BUDOVICE BRNO Prague and therefore we 3 are negotiating about other attractive locations for HubHub. Source: BNP Paribas Real Estate 75% located in Prague Petr Herman, HB Reavis, Czech & Brno Republic

7

ST NAD 2 2 LABEM TEPLICE 1 LIBEREC HRADEC KRLOV 1 BRANDYS KADAŇ 1 1 NAD LABEM 2 CHOMUTOV 33 PRAGUE 1 3 OSTRAVA 4 OPAVA 1 ZLATNIKY KOLIN PARDUBICE 2 – HODKOVICE 2 HAVÍŘOV 1 2 KARVIN LITOMYL 1 OLOMOUC PLZEŇ PŘIBRAM 1 1 PŘIBOR 1 HAVLIČKŮV + PŘEROV 3 TBOR 1 BROD 1 NOVÝ JIČÍN 1 ZLN 3 ČESKÉ 9 BUDĚOVICE 1 BRNO 1 UHERSK HRADITĚ COWORKING IN THE CZECH REPUBLIC - SEPTEMBER 2018

NUMBER OF STUDENTS PER THOUSAND INHABITANTS IN SELECTED CITIES

O 200

B 6 České Budějovice 40 299,070 Number of students Hradec Králové 09 in the Czech Republic

Z 04

P 90

Ústí nad Labem 9

Pardubice 7

Plzeň 7

Ostrav 70

Source: Ministry of Education

It is key to find a balance between the increased utilisation of space by events and comfort of the members. Jana Trličíková, PORT

8 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER WHY COWORKING? HOW & FOR HOW MUCH?

WHAT IS THE CASE FOR One of the advantages of COWORKING CENTRES? coworking spaces is the 200 – 400 CZK ability to pay only for what DAILY PRICES. • Coworking centres can help to MEMBERSHIP COSTS DIFFER revitalise older unused space. you need thanks to various BASED ON WHETHER YOU USE membership types. These A FIX DESK OR A SHARED ONE. • They can help to increase occupancy in B and C class include options for daily properties. or monthly fees. • They can provide an appealing addition to standard office occupier mix and attract corporates in the building to seek a proximity to 2,200 CZK 3,000 – 6,000 CZK talent and a creative environment. THE AVERAGE PRICE FOR PRICES FOR MONTHLY UNLIMITED MONTHLY UNLIMITED ACCESS ACCESS WITH FLEXI DESK • They can act as a counter-cyclical risk mitigation in times of economic IN SMALLER TOWNS. IN PRAGUE. downturn as coworking centres flourished in the times of crisis when numbers of self-employed people has rised and pressure on cost reduction increased. REQUIREMENTS OF COWORKING CENTRES • Start-ups residing in coworking KEY REQUIREMENTS FOR SPACE CITED is crucial to ensure a vibrant and vivid en- centres may evolve to large BY THE INTERVIEWED OPERATORS ARE vironment. occupiers very quickly, providing THE GENIUS LOCI OR THE ATMOSPHERE potential for increased rental OF THE BUILDING AND THE LOCALE. The landscape of coworking centres in income in the future with their Four coworking centres are situated in for- the Czech Republic is very diverse, there need for standard office space and mer industrial properties, to act in their are hybrid coworking centres like Work- expansion. new form as idea factories for the future. lounge, offering both a networking lounge Accessibility is crucial especially by public but along with closed cellular offices and transport as many of the members do not focused more on business clientele. Im- possess cars. Thus parking is welcome but pact Hub centres are based around the not always requested or necessary unlike idea of social entrepreneurship and show in traditional offices. The attractiveness of a diverse pool of members with about half the location and vicinity plays a key role in of the resident members coming from IT the choice of the target group. Worklounge and the rest from the marketing sector. suggests, for some clients their Wenceslas Other operators such as Node5 special- Square unit is appealing as a represen- ise in start-ups and the IT and technology tative office and address. For other- us sector. A key differentiator HubHub sets ers it feels too touristy and too posh and itself is the aim to provide to its members their workers prefer the fresher feel of with the building of a community network the trendy Karlín unit. Adaptability of the also the connection with the investors space allowing for different set up is im- and the corporate world. portant, to serve as open space – cowork- There are also highly specialist operators ing area, theatre seating training session such as Mumraj or Baby Office focused on or a fashion show. Flexibility to play with mothers with children. the space and accommodate different uses

9 COWORKING IN THE CZECH REPUBLIC - SEPTEMBER 2018 WHAT IS THE FUTURE OF COWORKING IN THE CZECH REPUBLIC?

SPECIALISATION PROFESSIONALISATION DIGITAL NETWORKS CORPORATE & PROFILING The Czech coworking sector will Coworking chains and COWORKING further professionalise pushed by even individual coworking We believe that the future the entry of international coworking operators are integrating In Western Europe and the US, of coworking will be in chains. Some of the excess their processes into large corporations are more further specialisation coworking space may shift into smart apps that run the frequently locating close to of individual operators. the serviced offices category. The centre from booking the coworking centres or even There will be operators sector is likely to see a shake-out meeting rooms, monitoring dedicating some excess space for creative industries like at some point and some operators meal consumption in the for start-ups and freelancers designers and architects, will cease to exist. The remaining kitchenette and issuing within their premises. As more coworking centres for IT operators local or international invoices to members. and more cowork chains locate and technology start-ups, will get stronger. Nevertheless we into grade A office properties artist hubs combining believe there will still be a space Many chains have a wide in Prague, this trend will offices with gallery spaces. for well-thought concepts. virtual membership base also strengthen in the Czech creating a digital network market. A financial institution Additionally, more services and community beyond the rents space in Impact Hub might be offered by some hubs four walls. Prague for its innovation team, including accounting or business in Berlin The Factory hub advisory aside mentoring, training Deutsche Bank sits alongside and counselling of members. millenial start-ups or Microsoft Many operators use events as in Wework in New York. a substantial source of revenues; this might even strengthen in the future.

10 We are here for everyone who is looking for the best working environment. Our notion of a co-working space is different, for us it is not only about sharing a workspace. We form a tightly-knit community of people where work, knowledge and ideas meet on daily basis. Šimon Vodrážka, K10 CONTACT BUSINESS LINES Tibor Ovečka Head of Office Agency +420 603 422 500 [email protected] 6in Europe Lena Popová Associate Director, Office Agency +420 608 637 883 [email protected] A360°vision Main locations* Alliances*

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Picture credentials: investors and communities in their projects thanks to our local expertise across 36 Cover, P9: Fotolia countries. BNP Paribas Real Estate is part of the BNP Paribas Group. P2: photo by courtesy of Node5 P4-5: photo by courtesy of Regus As regards Central & Eastern Europe, we provide services in respect of Capital P6: photo by courtesy of Worklounge P8: photo by courtesy of Port Markets, Property Management, Transaction, Valuation and Consulting. P10: photo by courtesy of Impact Hub For more information: www.realestate.bnpparibas.com P11: photo by courtesy of K10 and www.realestate.bnpparibas.cz.

All rights reserved. The report was prepared by BNP Paribas Real Estate. All data provided in the publication have been carefully verified, however the authors of the report shall not be held liable for any damage or loss which may arise from the use of the data published. Reproducing, modifying or using any of the contents hereof without the permission of the authors @BNPPRE of the publication is prohibited under the provisions of the applicable law. It is permitted to quote the contents of the publication only when clearly stating the source. www.realestate.bnpparibas.cz Real Estate 2018, R-18-2-CZ © BNP Paribas

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