What kind of challenge for coworking ?

Feedback and crossed views from operators, businesses, and coworkers.

Thematic Report | February 2020 EDITORIAL

Paris is one of the European industry leaders, whilst others cities that have seen the are opting for more niche strongest coworking growth. positioning. Due to its many Although the share of variations and territories, to coworking surfaces, estimated multiple user motivations at 3.5%, remains marginal in and to its range of uses by the French capital’s business employees or freelancers, park, operator leaseholds coworking is a shape-shifting have flourished over the last concept. three years, accelerating This report aims to offer a the development of these cross-sectional perspective spaces in and in several between what operators neighbouring areas. Well- promise and feedback from anchored in the real estate coworking users. To achieve landscape, coworking spaces this, we interviewed operators are now seen as a standard and business decision makers, solution for businesses working with the International looking for offices. Market Research Group (IFOP) Originally intended for to collect the opinions of freelancers and very small coworkers, the people who businesses, coworking began experience coworking. to flourish as it became more commonplace in the economic sphere. It is AUDREY ABITAN supported by a proliferation Head of Research & of operators with newly Development established and evolving models and strategies, some LAURENCE BOUARD of whom aspire to joining Head of Research

2 What kind of challenge for coworking? | Colliers International SUMMARY

Introduction • Methodology 04 • Respondent motivation & usage 06 • A brief history of coworking 08

An answer to business challenges • Large organisations inspired by smaller ones 10 • Interview: Frédérique Miriel 13 • At the heart of a company’s strategy 14 • Tour of a coworking space 18 • Key points 24

A workplace or a community space? • Two naturally related concepts 25 • Community as a way of standing out 27 • Contrasting user experiences 30 • Key points 35

Future developments • A diversified range of services 36 • Interview: Cyrille Berthet 37 • Attracting large 40 • Real estate services 44 • Key points 45

Conclusion 46

Acknowledgements 49 About us 50 Contacts 51

Colliers International | What kind of challenge for coworking? 3 METHODOLOGY

Colliers International , working with the IFOP institute, conducted a report in order to provide an overview of coworking that weighed up the offers of operators with feedback from coworking space users (decision makers, company employees or self-employed workers). The report was conducted around a series of interviews and a quantitative survey.

4 What kind of challenge for coworking? | Colliers International Qualitative methodology Quantitative methodology Colliers International France’s Colliers International and Research & Development and IFOP collected feedback Research teams interviewed from “coworkers”*. twenty company decision This was a self-administered makers who use coworking online Computer Assisted spaces (large corporations, Web Interview (CAWI) of temporary 435 coworking space users businesses, SMEs, very small from 6 June to 16 September businesses), along with ten 2019. coworking space operators. The interviews were conducted in person, from January 2019 to May 2019. Respondents came from the following companies: Thalès, Atos, Société Générale, Orange, EY, Nokia, Groupe IMA, Conseil Régional d’Ile- de-France, Le Bon Coin, Sogaris, Saentys, Censhare, CSM, Alteryx, DreamQuark, Atelier Phare, Ring Capital, Studio Margery, Teamleader, Agence Morse, J. Calderoni Notaire. Coworking operators included: Deskopolitan, Groupe IWG, Kwerk, Morning Coworking, Second Desk, Startway, The Bureau, Welkin & Meraki, Wellio, Weréso, WeWork, Wojo. *Coworkers: employees or freelancers who occasionally or regularly work in a coworking space.

Colliers International | What kind of challenge for coworking? 5 Respondent motivation & usage

LENGTH OF USE WEEKLY USE

How long have you been How often do you work in a using a coworking space? coworking space each week?

40%% 40%% 39%% 36%% 20%% 25%%

Less Between For Less 1 to 3 More than 3 months over than times than 3 3 and a year once times months 1 year Source: 2019 IFOP survey for Colliers International

6 What kind of challenge for coworking? | Colliers International BY CHOICE OR OBLIGATION?

Why did you start using a coworking space?

It’s an optional service offered by my company. 36%

The decision was imposed by my company, I didn’t have a choice. 32%

It’s a personal choice, I’m not part of a company. 20%

I asked my company for this option. 12% Source: 2019 IFOP survey for Colliers International

MAIN MOTIVATIONS

What are your main motivations for using a coworking space?

Optimised commuting and time 68% management. Available services. 64%

Quality and variety of spaces on offer. 62%

Cost and flexibility. 61%

Openness, meeting people, networking and community. 58%

For image reasons vis-à-vis clients, colleagues, and investors. 45% Source: 2019 IFOP survey for Colliers International

Colliers International | What kind of challenge for coworking? 7 A BRIEF HISTORY OF COWORKING

Coworking arose from a need for working spaces and tools that were adapted to a community of people and organisations. But that’s not all: originally, coworking was a way of sharing and participating in discussions, a place to make connections and start projects.

19th CENTURY 1995 2005

Collaborative work In 1995, with the In the wake of started in the 19th growth of NICTs*, the industrialisation, which century, when artist Hackerspace C-Base, had already transformed studios began grouping seen as a prototype many trades, 2000 together as a way of coworking, was launched a new era as of developing and founded in . occupations became stimulating creativity. increasingly computerised. The first coworking space opened in San Francisco, in 2005, at the Spiral Muse collective. It was invented by a programmer called Brad Neuberg, who wanted to create a more community-based workspace than traditional offices, while being more productive than working from home.

*NICT: New Information and Communication Technologies

8 What kind of challenge for coworking? | Colliers International Fondation Travailler In addition to involving Autrement makes an professional activity and inventory of several third socialising, coworking spaces place categories: third places are primarily places where devoted to services and public professional activities and innovation, social third places, personal development blend, cultural third places, third coming in alignment with places driven by innovation, pressing demands from and activity-based third workers regarding the quality places. of their life at work. The ensuing “community” that It is in this last category that emerged from these new “coworking finds its place, workspaces became a pivotal as a community of people element of coworking sites. and organisations that share more than a location and work tools, one that makes it possible to socialise, connect, and share projects.”

The increase in coworking spaces is partly due to 2008 2010 the overlapping of two triggers: the 2009 crisis, when confidence in salary- In France, the first The early 2010s saw the based work was shaken and coworking space only opening of more and challenged the entire system, appeared in 2008, more coworking spaces. and the advent of economic with the opening Bolstered by the evolving activity that is strongly of "La Cantine" needs of companies, connected to the digitisation (now NUMA), in the this trend experienced a of work. Sentier, a Parisian considerable acceleration neighbourhood. Ten in the last five years of or so further sites the decade. opened in France that year.

Colliers International | What kind of challenge for coworking? 9 AN ANSWER TO BUSINESS CHALLENGES

LARGE ORGANISATIONS INSPIRED BY SMALLER ONES

Start-ups, self-employed coworking undeniably plays workers, and very small to easier daily routines, so businesses quickly took over workers can concentrate on these new workplaces. Young their core profession and companies face a sobering their growth. Together with economic reality when they their range of services, the want to establish business quality and variety of available premises. Unlike classical spaces are all arguments in 3/6/9-month commercial favour of coworking, as they leaseholds, coworking makes contribute to managing every it possible to benefit from technical or administrative offers that are more adapted aspects through an all- to their needs by maintaining inclusive offering. These a high level of flexibility both hybrid spaces offer a work space-wise (by renting), and environment that combines timewise (short leases). As innovation, flexibility, and lessors demanded higher low costs, all of which are deposits and longer leasing highly desirable to young periods, coworking, by renting companies and freelancers out space by the hour, the (self-employed workers). day, or the month, is more These early adopters of a adapted to their evolution shared community space have stage and often hazy growth chosen these places focused perspectives. Opting for on making connections and

10 What kind of challenge for coworking? | Colliers International on common interests as a way amongst younger generations of breaking down isolation, – are encouraging directors but also to create synergies and decision makers to and facilitate professional rethink their organisation and collaborations. employee workspaces. Simultaneously, the rise in In so doing, companies have new, more collaborative a greater appetite for atypical work methods, along with coworking spaces – i.e. wanting to attract talent and outside a company’s premises improve the quality of work – and is even reaching large life of employees – especially corporations.

Big open floor plan | Morning Coworking Marcadet ©HERO_morningcoworking

Colliers International | What kind of challenge for coworking? 11 BOOSTING COLLABORATION 60% AND FLEXIBILITY of employees feel that a flexible environment contributes to a positive image Today, work environments of their company and to its must address several major performance.* issues, such as • The “CO” factor: supporting On average, collaborative ways of working and a team spirit. Workspaces must increasingly adapt to “project mode” organisation 63% to stimulate creativity and of respondents “always innovation. The need to enjoy going to work.”* belong involves rethinking space itself, and how shared space and other social places *based on a study conducted by Colliers can be changed. International, “Flex office : du fantasme à la réalité” (Flex office: from fantasy to reality), which interviewed 496 employees in flexible offices, from • The “FLEX” factor, which a sample of 3,500 employees in service industry both reflects a desire to companies of over 100 employees. optimise space and addresses a growing societal need for more flexible work environments and a better “Choosing coworking is set work-personal life balance, as against the backdrop of reflected in the teleworking boom in recent years. In terms transforming the Group’s of spaces, “flex” translates working methods. It’s as more modular, diversified about promoting project- design that focuses on usage. based work, innovation, Coworking is part of this larger and a community spirit.” context and aims to support Stéphane Bézias, the emergence of New Ways Head of Real Estate, of Working. Nowadays, IMA Group operators don’t only supply offices; they want to create spaces and offer services that meet the needs of businesses.

12 What kind of challenge for coworking? | Colliers International INTERVIEW

How does coworking fit into the business creation aspect is New Ways of Working? less prominent, as coworking spaces are far from being used I see three approaches. exclusively by freelancers. This First, coworking contributes to a better is especially true in Paris and its quality of work life, by offering a better region. private/professional life balance, and in so While it is still poorly understood doing, improves the efficiency of workers. by companies (due to distrust or Commuting and travel times are reduced, unfamiliarity), coworking should as users tend to work in spaces that are close continue to develop in years to to home. In this case, mainly suburban or come. In fact, more and more regional coworking spaces meet the needs companies are contemplating of both companies and employees. corpoworking, internal working Next, in a fluctuating and uncertain economic spaces inside a company that context, usage, which is growing faster open their doors to external than anticipated, means whatever meets a workers. These spaces come company’s need for flexibility. In this logic, in response to a keenness for companies can establish temporary teams companies to be more open and and quickly access rented space. Here lies transversal, to better welcome one of the real advantages of coworking: its employees from a company’s flexibility over a given period (no commitment, various locations and incubate no need to give more than a month’s notice) start-ups, but also to welcome means that users only pay for what they really Research programmes or need. Their usage can also quickly adapt to partners for shorter durations. their evolution, such as internal growth, or the need to swiftly implement a project platform, etc. For constantly evolving businesses, coworking is a real solution to the increasingly important requirement for flexible real estate. Additionally, it provides employees with workspaces that are often more innovative and more adapted to collaborative practices, although more care should be given to ergonomics, which are not always optimal. Finally, we’ve moved well beyond the initial FRÉDÉRIQUE MIRIEL vocation of coworking, which was for Head of Workplace, freelancers to mingle. While the community Change Management and and social aspect of these spaces remain, Research & Development departments

Colliers International | What kind of challenge for coworking? 13 COWORKING AT THE HEART OF A COMPANY’S STRATEGY

1. Attracting and “Choosing to establish retaining talent the Digital Factory inside WeWork Lafayette Attracting and retaining talent was motivated by the was often mentioned by company respondents. The need, within a limited Digital Factory, created by the period, to attract highly Thalès Group in the centre in demand talent on of Paris, is an example that the job market: skilled perfectly illustrates the need talent looking to work in for a major group, mainly established in the suburbs, the Ile-de-France region, to attract younger employee essentially within Paris profile types who are popular proper, and in a cross- on the job market. Regardless fertile environment.” of their size, companies prize their coworking setup as an Eric Supplisson, employee brand element. Real Estate Director, Thalès Group

“Companies that set up project teams in our spaces are looking for a less corporate work environment, one that is very flexible. They want to attract and retain the best profiles and create a different kind of emulation for their employees.” Gaël Montassier, Founder, Partner and Deputy Managing Director, Startway

14 What kind of challenge for coworking? | Colliers International Paris 16 coworking space ©Startway

Colliers International | What kind of challenge for coworking? 15 68% 2. Quality of life of survey respondents felt at work that coworking helps them optimise their commutes As revealed in the 2018 survey and their time management. conducted with employees Amongst regular users by BVA/Salesforce, well-being (1 to 3 times/week, this rate reached at work is the No. 1 priority of French employees (59%), further confirmed by the Observatoire Actineo/CSA, 75% where quality of life at work is an important element for Source: 2019 IFOP survey for Colliers International 45% of employees, behind interesting work (50%). Companies are therefore more and more attentive to survey, optimised commuting elements that contribute to and time management also their employees’ quality of come at the top of coworker life at work. To this end, they motivations. In addition, as are turning to coworking to telework develops, coworking meet the increasing needs of has become a tool companies their employees for flexible offer employees. Rather than workspaces and working work at home, employees may times. According to our choose a coworking space.

“Coworking is part of an overall reflection on work mobility and well-being at work. The opportunity No. 1 is one of several new ways of working at our Motivation headquarters, especially for the 1,200 agents who telework up to two OPTIMISED days a week.” COMMUTING AND Ulysse Dorioz, Directeur of Transformation, TIME MANAGEMENT Ile-de-France Regional Council

16 What kind of challenge for coworking? | Colliers International 3. Supporting the transformation of working methods

“We have two modes of For companies who coworking: a nomadic mode, implement projects that which is similar to teleworking involve management and and has the same rules as working method changes, coworking can be a way teleworking in terms of the of experimenting with number of working hours new work environments (at most, two and a half before a broader company days a week), and a project deployment. mode, which sets well-defined Coworking is also a solution working hours. In the first case, when setting up project employees work in essentially teams. On one hand, it makes it possible to adapt open floor plans, while in the an engagement period to a second scenario, spaces are project’s duration, and on privatised for different groups.” the other, to take employees outside company premises, stimulating emulation Jean-François Perrillat, and facilitating a spirit of Head of Work Environment, innovation in a different work Atos France environment.

Colliers International | What kind of challenge for coworking? 17 TOUR OF A COWORKING SPACE

Who uses coworking Frequency of use of other spaces spaces? (when available)

Common spaces 88% 1 (cafeterias, terraces, relaxation areas) /3 12% 20% 45% 23% 78% big Meeting rooms companies 22% 29% 37% 12%

Private enclosed space 78 1 (individual or shared) % /3 22% 30% 32% 16% SMEs, very small Bubblespaces / private phone booths 75% businesses (can’t be reserved) 25% 32% 34% 9%

1 Open floor plan 73% /3 (hot desk) 27 27 28 18 Freelancers % % % % Source: Les Échos Études: Open floor plan “Le marché français du (dedicated desk) 69% coworking et du coliving (The French Coworking and Coliving Market), October 2018 31% 27% 23% 19%

not used rarely often always Source: 2019 IFOP survey for Colliers International

18 What kind of challenge for coworking? | Colliers International “Our layouts facilitate COMMON SPACE discussions by offering FOR SOCIALISING very attractive shared spaces, along with AND COLLABORATIVE managing these spaces.” WORK George Yates, Director of Key Account Common space is central Strategic Relations at WeWork to coworking, and has even become its trademark, as opposed to traditional business hubs. Beyond its social dimension, it is designed as truly multifunctional, informal This type of space is most space for everyday activities frequently used by coworkers, and special events, one-off receiving the highest individual work, or improvised satisfaction score: 74% of meetings. As an answer to users are satisfied, with a expectations related to quality special distinction for shared of life at work, common spaces run by independent spaces received special operators, which scored 83% attention for their layout. satisfaction.

Big central room | WeWork Paris Lafayette ©WeWork

Colliers International | What kind of challenge for coworking? 19 Private office example | WeWork THE IMPORTANCE OF Paris Lafayette ©WeWork PRIVATE OFFICES

Private offices seem to be a coming last (69%), showing marker of how coworking is that coworkers settle in evolving. more than one space type, depending on circumstances. Growing interest from mid- cap companies and large The usage rate of these corporations for these new enclosed spaces is higher with premises is due to them both coworker employees of large symbolising modernity and corporations (89%). Overall, flexibility when it comes to private offices satisfy most putting staff in place on a coworkers (69%) and are relatively permanent basis, particularly appreciated by as long as they can access bosses (83%). closed shared office space Operators are facing a real to ensure a certain level of challenge to meet modularity confidentiality. needs, for example when In terms of workstations, a start-up starts growing coworkers are able to access exponentially, but also to private offices (individual or offer spaces that can be shared), or open floor plans customised. (dedicated or self-service access). Enclosed private spaces come at the top of preferred workspaces (78%), ahead of hot desks (73%), with dedicated open floor plans

20 What kind of challenge for coworking? | Colliers International “My dissatisfaction MIXED RESULTS: was motivated by noisy workspaces FEEDBACK AND AREAS and a lack of FOR IMPROVEMENT privacy.”

Julien, self-employed Ergonomics, design, and coworker furnishings are considered to be of high quality, as these three categories exceed 70% in satisfaction. However, the acoustic quality and privacy of these spaces could be Evaluating workspace considerably improved. quality It is worth noting that 78 Ergonomics % a possible solution for managing noise and privacy, 18 57 21 such as small enclosed spaces % % % like bubblespaces and phone booths, are still only offered 71% by 71% of coworking spaces, Design according to respondents. 75% of coworkers use them 21% 45% 26% (just behind enclosed private offices), indicating a real need 71 in this category. Furnishings % These are “typical” areas for improvement in terms 21% 50% 21% of managing noise and privacy in mostly open plan 54 environments, reflecting a Acoustics % need to learn how to work together, community living 14% 27% 41% 13% rules, as well as an ever- increasing need to balance 51% open floor plans with Privacy adequately soundproofed quiet space, such as 19% 25% 38% 13% “bubblespaces”.

very poor quite poor neither good nor bad quite good very good Source: 2019 IFOP survey for Colliers International

Colliers International | What kind of challenge for coworking? 21 ARE SERVICES A DIFFERENTIATING FACTOR?

Operators were quick to In addition to design, highlight that their spaces they help start-ups attract had a service-driven nature. highly desirable talent by Consequently, in addition to providing a high-quality general services provided work environment. In this by managers, they offer a respect, services seem to be range of amenities to provide an even more decisive factor comfort and an improved in choosing coworking for quality of life at work (food, employees who work in a very gym, conference and event small business, since 77% of spaces, etc.). them quote them as being their main draw, compared Additional amenities are an to an average of 65% of all employer-brand asset for respondents. companies.

Importance of services for coworkers 94%

Technical amenities WIFI, photocopying, equipment 30% 64%

Self-service access 24/7 badge 11% 43% 41% 84%

Food Café, kitchen, etc. 16% 50% 32% 82%

Professional amenities Seminars, meal trays, etc. 29% 41% 24% 65%

Concierge services Dry-cleaning, taxis, etc. 9% 32% 42% 18% 60%

Cultural events 16% 34% 38% 13% 51%

Gym 20% 31% 36% 13% 49%

Not important at all Not so important Quite important Very important Source: 2019 IFOP survey for Colliers International

22 What kind of challenge for coworking? | Colliers International Availability and use of amenities by coworkers The usage rate was calculated based on answers indicating that a given amenity was on offer. Usage rate 85% Technical amenities WIFI, photocopying, equipment 7%12% 12% 69% Usage rate 75% Food Café, kitchen, etc. 9% 24% 17% 50% Usage rate 72% Self-service access 24/7 badge 12% 35% 15% 38% Usage rate 40% Professional amenities Seminars, meal trays, etc. 17% 26% 34% 23% Usage rate 44% Concierge services Dry-cleaning, taxis, etc. 20% 41% 22% 17% Usage rate 45% Cultural events 20% 42% 21% 17% Usage rate 28% Gym 18% 42% 29% 11%

Don’t know if this is offered Not offered Available, but not used Used Source: 2019 IFOP survey for Colliers International

Temporary employment “We chose a very businesses and large well-placed location companies follow a similar dynamic. Opting for that had quality coworking helps attract workspaces, luxurious talent by enabling them amenities and services, to work in more modern all of which are assets work environments with for attracting talent.” premium amenities. For these companies, the challenge is to create that dynamic by Gilles Blaise, specifically posting profiles International Director, calling for special treatment Saentys to these settings: digital teams, teams developing intrapreneurships, etc.

Colliers International | What kind of challenge for coworking? 23 Aside from technical their usage rate is below 40%, amenities (WIFI, photocopying, falling to only 28% for gyms. equipment, etc.), listed as However, it’s important to essential must-haves, the note than workers under 35 most important services for have higher expectations for coworkers were self-service concierge services and gyms, access and food. These which can also contribute services are very popular, but to attracting young talent to don’t seem to be sufficiently companies, and therefore to on offer. selecting a coworking space. Professional amenities, Overall, when they are on concierge services, and offer and used, services especially cultural and sports provide a high level of events were less in demand, satisfaction to coworkers. and when they are offered,

KEY POINTS

On the whole, Coworking spaces Essential services are users are satisfied are therefore mostly sought out and are adapting emblematic of (tech services, WIFI to the range of current work access, food) while existing spaces and environment “community” services services. trends, responding appeal to a smaller to quality of life group of coworkers. expectations.

24 What kind of challenge for coworking? | Colliers International COWORKING: WORKPLACE OR COMMUNITY SPACE?

TWO NATURALLY RELATED CONCEPTS

Coworking and community is a differentiating factor in spirit have always been the current coworking offer. connected: in addition to This argument, frequently being workspaces, coworking showcased by managers in is a way of sharing and brand communications, is a discussing things, a place means of cultivating a “new to create connections and work experience” that is projects. more focused on professional and personal enrichment In order to still be a vital through multiple services part of coworking, many and opportunities to connect. managers, regardless of Although many operators their size, are highlighting show off their community their community spirit. While as an unquestionable asset, spatial-temporal flexibility is users have a somewhat an undisputable parameter different opinion. Community in coworking, having a mostly counts for freelancers. community-friendly space This tendency also confirms key third place factors: breaking down isolation amongst freelancers and small companies, and providing an environment that 63% will facilitate synergies and professional collaborations. of freelancers choose coworking for its community spirit.

Source: 2019 IFOP survey for Colliers International

Colliers International | What kind of challenge for coworking? 25 “The difference with Regus is that our brand reaches even further at Spaces in terms of shared spaces and running community events. Our Spaces locations offer bigger shared space, organise and run events that encourage synergies amongst members. Regus clients have an approach that focuses more on providing private offices, although they appreciate opportunities for meeting their neighbours.” Christophe Burckart, Managing Director, IWG Group France

Morning Coworking and its hyperactive community ©HERO_morningcoworking

26 What kind of challenge for coworking? | Colliers International MANAGERS RELY ON THEIR COMMUNITY AS A WAY OF STANDING OUT

Events, first Community Service To run a community and and exhibitions… Others are manage this full-blown more geared as professional service, managers rely on events: legal or accounting a broad range of tools and support, career showcases, events. brainstorming on a coworker’s issues, conferences… All Events are therefore at the aim to facilitate discussions heart of the community. Some amongst coworkers and create events are more recreational a sense of unity to a space. and focused on getting Through these events, some people to know each another managers want to encourage in a friendly atmosphere: professional opportunities afterwork events to socialise between coworkers. and network, small luncheons to welcome new members, An attractive aspect of sports classes, art previews coworking, these services are experienced differently depending on their operator. For some, having a gym is a premium differentiating “Community managers, factor, while others will be more interested in social, who work onsite, are such as afterwork drinks. essential to running our These events are sometimes community.” open to external people, Christophe Burckart, as a way of opening the Managing Director, site to its environment and IWG Group France consolidating an operator’s brand positioning as a hub for events.

Colliers International | What kind of challenge for coworking? 27 Human support, Digital support: making an indispensable part everyday life and of running a site communication easier Some operators hire a multi- Running a thriving community talented community manager also means maintaining a or a coworking manager digital presence through to run their workspace. smartphone or web They tend to have several apps that facilitate daily responsibilities: managing communications. These tools logistics and technical help manage contracts, book aspects, running a thriving meeting rooms, or report community, and sometimes issues. They also serve as a even handling a site’s business showcase for a site’s life, by communications. Beyond communicating events and creating a friendly, pleasant inviting community members work atmosphere, a coworking to share them on social manager’s mission is to media. connect coworkers according to their job and their needs.

Importance of community services for coworkers 73% Having a person in charge of running 21% 47% 26% community events onsite

Participating in 69% social events 24% 48% 21% (for ex., afterwork drinks)

Accessing 69% professional events (seminars, accounting 24% 46% 23% or admin support, etc.)

Accessing an 68% online platform 27 42 26 for coworkers % % %

Not important at all Not so important Quite important Very important Source: 2019 IFOP survey for Colliers International

28 What kind of challenge for coworking? | Colliers International “Animating our spaces creates a learning dimension, thanks to our “experience mornings,” which helps bring people together in a friendly, off beat atmosphere. “Morning Managers” are responsible for introducing onsite businesses over breakfast and drinks, for sharing expertise amongst members, events, seminars, and even in-house social networking. We ask members to contribute to these events, because what matters most to us is doing things with our members, not for them.” Clément Alteresco, CEO, Morning Coworking

Coconstructed COMMUNITY

In some coworking environments, Consequently, open space especially among independent operators, environments encourage community extends beyond events socialisation and professional and online apps. It’s about cocreating a synergies, while closed offices community, pitching in, even if an event tend to compartmentalise isn’t formally being organised. In this informal relationships context, offering legal or accounting between users. Smaller help to an open floor plan neighbour premises tend to prefer hybrid has become an informal habit in some workspaces, that encourage environments space. more open-ended business and friendly relationships. Some workspaces adapt their work environment in order to facilitate and promote exchanges.

Colliers International | What kind of challenge for coworking? 29 “FORCED” OR “ENCOURAGED” COMMUNITY: CONTRASTING USER EXPERIENCES

Events: enjoyed, yet seldom used Having a community matters to coworkers: “We don’t necessarily go to every event, but we see them as a bonus.” 69% Julien Delcambre, Managing Director, of respondents said Atelier Phare community services are important.

Source: 2019 IFOP survey for Colliers International

While services and events are particularly appreciated (over 70% of respondents), their use is measured, since coworkers only partly use them and seldom participate in events (used between 28% and 40% of the time). Our interviews complete these figures: overall, company respondents participate in coworking life via professional services and events, but not regularly).

30 What kind of challenge for coworking? | Colliers International Digital apps mainly used for daily management All users agree on the convenience of digital apps to “We’ll notice a flyer manage their contract, book on the fridge or in a meeting room, or report an the photocopy room, issue. Social networking use is but not always on clearly more limited. the app. Our days are Only 23% of respondents quite busy, so we don’t use these platforms. have time to check or The reason is quite simple: manage another social there are already many social media apps, whether network.” for keeping in touch with Hagera Sendabad, friends or for professional Operations Manager, networking, and this one Ring Capital don't have a significant interest in networking.

Community services offered and used by coworkers 55 Participating in % social events 17 28 27 28 (for ex., afterwork drinks) % % % %

Accessing professional 49% events (seminars, accounting or admin 20% 31% 28% 21% support, etc.) 44 Accessing an % online platform 21 35 21 23 for coworkers % % % %

Having a person in 42% charge of running 19 39 19 23 community events onsite % % % %

Don’t know if this is offered Not offered Available, but not used Used Source: 2019 IFOP survey for Colliers International

Colliers International | What kind of challenge for coworking? 31 Social events sought out and appreciated, especially by self-employed Social events are seen as workers, who draw notoriety a differentiating factor from it. This category of compared to typical users attends social events workspaces. Although (44% of freelancers) more participation is partial (only than employees, particularly 28% of respondents), the those employed by large quality of these events is companies (only 16%), who particularly satisfying already benefit from a social (87% of respondents). circle in their company and Our interviews with feel less the need to create companies fleshed out and professional synergies. In enriched this cross-sectional fact, coworking sites for perspective. As with other freelancers have the highest services, it’s not about usage rate, with 40% of participating in every event, coworkers participating, since but social events are most most of their users are small companies and freelancers.

Satisfaction of users who use community-based services

Having a person in 95% charge of running community events onsite 47% 48%

Participating in 87% social events 11 48 39 (for ex., afterwork drinks) % % %

Accessing professional 87% events (seminars, accounting or admin 8% 48% 39% support, etc.)

Accessing an 85% online platform 8 52 33 for coworkers % % %

Not satisfied at all Not really satisfied Neutral Quite satisfied Very satisfied Source: 2019 IFOP survey for Colliers International

32 What kind of challenge for coworking? | Colliers International Perceived benefits of community from both sides:

66% Professional Personal 64% agree agree 23% 26% 28% 27% 7% 4% 40% 5% 37% 3%

Don’t agree at all Don’t really agree Neutral Quite agree Totally agree Source: 2019 IFOP survey for Colliers International

Is the glass half empty or half full? Community is still an intrinsic people to take advantage of part of coworking, despite them professionally, as the how the model is evolving. aim is to create synergies A differentiating element and to facilitate professional for managers, multiple user connections, especially for feedbacks present a vision of freelancers. a community that is mostly experienced based on a coworker’s professional status and on a given location. Community benefits are globally satisfying (see above). These figures are positive, but don’t 8% demonstrate a substantial advantage of a community of freelancers feel that for coworkers, especially they have benefited when correlated with the low from their community. use of community services.

However these services Source: 2019 IFOP survey for Colliers International should logically make enable

Colliers International | What kind of challenge for coworking? 33 WHAT IF A COMMUNITY DOESN’T COME TOGETHER?

While benefits arising from in the coworking space. tools and services are According to our survey, this hard to assess, creating is also the most important a sense of belonging to a service, especially for small place with a well-defined companies, where over 80% identity is a success. In this of respondents consider it respect, operators have as an essential role for a site been successful: company to run smoothly. However respondents agree in saying not all operators offer this that the most important (only 42% of coworking and appreciated aspect of a spaces, according to our community are the friendly IFOP survey), or they bypass ties between coworkers and a the communication role that space’s friendly atmosphere. allows all coworkers to work in a healthy environment despite A sense of community actually different activities and work arises from less formal tools. rhythms. Common spaces, where discussions and meetings happen, such as cafeterias or relaxation areas, are widely sought out by users (88% of respondents regularly use common spaces such as meal areas, terraces, or leisure areas). Community or coworking managers are also excellent tools for fostering an informal community spirit. While they may have multiple roles, coworkers essentially see them as facilitating communication

34 What kind of challenge for coworking? | Colliers International KEY POINTS

OPERATORS CoworkERS COMPANIES

Community remains On the coworker side, Freelancers and a part of coworking, community only ranks employees from and for many fifth in reasons for small companies managers, it is a choosing a coworking draw the most on differentiating factor space. services developed in the current offer. by operators to run this type of community and take advantage of it.

Colliers International | What kind of challenge for coworking? 35 FUTURE DEVELOPMENTS

A DIVERSIFIED RANGE OF SERVICES: NATIONAL & INTERNATIONAL OPERATORS…

In a niche market, coworking Among these actors, some has become a full-fledged part are positioned as generalists, of the real estate market in while others prefer more just a few years. The sector is niche positioning, either in becoming more standardised, terms of targeted clientele, of and new actors are emerging. their range level, and/or their The increase in coworking geographical location. operators is accompanied by The rapid increase in the a diversification of models number of operators on on offer. New offerings have the currently promising real appeared or come together estate market is now raising via two major operator questions on the durability of families: existing models. - International actors, either leaders (IWG, WeWork), or challengers (Deskeo-Knotel, Evolution of the number of Welkin, and Meraki). coworking spaces in Paris 327 - National actors, either 280 independent (for example, The Bureau, Deskopolitan, Weréso), or related 175 (subsidiaries or investors) to a real estate group (for example, Wojo, Wellio, Secondesk, Morning 32 Coworking, Kwerk, Startway, 16 and Anti Café). 2008 2011 2019 Source: Colliers International

36 What kind of challenge for coworking? | Colliers International INTERVIEW

What issues does coworking Coworking responds more specifically to a address? problematic that involves attracting talent and central locations for both clients and The question of alternative rental suppliers. models now has a bearing on over 70% of large real estate projects. I see this new offering as What future can we imagine for addressing two major issues: coworking? On one hand, the change in Coworking is not a replacement offer; it how employees (and not only complements typical rental management younger generations) see their tools. employers, who tend to be Coworking operators have activities related experienced as “employment to those of asset managers; their presence suppliers,” rather than as onsite and the services they offer have companies that carry unifying created a new category of asset, property or images and values. This motivates facility managers. In fact, lease terms are no companies to focus more on longer systematically a differentiating factor, the individual expectations of as some operators propose leases that are employees, especially on their comparable to classic commercial leaseholds well-being, through services in in exchange for sometimes considerable office buildings, a key coworking discounts, as filling their premises is the key advantage. to their business model. On the other hand, there is an increasing demand for flexibility, which addresses three major tendencies: 1. changes in organisation and hierarchical mechanisms (matrix-type organisation, internationalisation of groups, growing , etc.), 2. contracted economic cycles and the ensuing acceleration of reorganisations, 3. a shift from real estate Cyrille Berthet organisations in favour of Tenant Representation interconnected multipolar Director locations, following the logic of “one site = one job.”

Colliers International | What kind of challenge for coworking? 37 “Four years ago, key accounts represented 20% of our client base; they went up to Regardless of their size, all operators have noted a rise 50% in 2018.” in demand from temporary Christophe Burckart, employment businesses and Managing Director, large companies, and are IWG Group France counting on these clients to consolidate their business models. The considerable increase in surfaces leased by coworking an increased demand for actors demonstrates a growth residential and private in targeted companies, spaces. Operator models, with a growing number of including smaller ones, are transactions involving medium evolving in order to adapt to large surfaces. to this demand and win a more long-term clientele, Transactions > 5,000m² less volatile than freelancers conducted by coworking or very small structures, and operators in the Ile-de- that will commit over longer France region periods (often reaching 12 to +15% 36 months). 90,000 +35%% 80,000 +416%% 60,000 89% of large group 20,000 employees use enclosed and private 2016 2017 2018 2019 spaces, compared to Source: Colliers International an average of:

The progression of coworking users from temporary 78 employment businesses % and large companies has gone hand in hand with Source: 2019 IFOP survey for Colliers International

38 What kind of challenge for coworking? | Colliers International 30% developing a segment for key accounts. Those who are minimum proportion attached to diversity tend to of areas dedicated to showcase their community shared leisure and spirit, which is all the more social spaces. fruitful when a wide variety of Source: Les Échos Études: “Le marché companies is maintained. français du coworking et du coliving (The French Coworking and Coliving Market), To maintain their chosen ratio October 2018 of shared space, which is the very essence of coworking, operators are playing on Some operators are a densification of spaces exclusively or quasi-exclusively dedicated to workstations devoted to welcoming mature (with varying densification companies (temporary depending on the operator). employment businesses, large Densification and occupancy groups, or start-ups that have rates for private spaces are already raised capital), while what makes it possible to others are basing their model finance areas devoted to on mixed memberships while leisure and social spaces.

Colliers International | What kind of challenge for coworking? 39 ATTRACTING LARGE companies: WHY DO THEY FIND COWORKING SPACES APPEALING?

The flexibility offered by coworking solutions is without a doubt what most attracts “We define and draws these companies. ourselves as a Flexibility first involves premium flexible leaseholds with reduced office operator.” coworking commitments, unlike typical leaseholds, Alain Brossé, in which companies have CEO, longer commitments (with Welkin & Meraki a minimum of 3 years, and often 6, 9, and even 12 fixed years for large surfaces), and have less rigid exit alternatives. While operators may seem Flexibility also involves leased to have identical ambitions spaces with surfaces that are at first glance, all coworking adapted according to needs spaces are obviously not and evolve over time, while the same. For them, a offering employees more workspace often represents open-plan work environments a differentiating factor in the with trendy design. In fact, operators promote the collaborative approach and design quality of their spaces “Key accounts are as employer brand assets, along with attracting and on the lookout for retaining company talent. HR attractiveness and want to retain their employees.” Farid Elomri, VP Sales, Wojo

40 What kind of challenge for coworking? | Colliers International “Key accounts come to us for employer brand know-how and for flexible leaseholds.” Coworking spaces also aim to portray their positioning Lawrence Knights, by flaunting a prestigious CEO and Cofounder, location, services, community, Kwerk or comfort, depending on their ambition to appeal to a start-up culture or to a more corporate environment. In this way, by reaching beyond the purely functional aspect face of competitors. Hence, of a workstation, which until spaces stand out depending now was covered by business on the attention given to centres, coworking space work design, ergonomics, or to environments now be seen as shared or meeting spaces. key marketing tools.

Colliers International | What kind of challenge for coworking? 41 A TOOL FOR DEVELOPING LOCAL TERRITORIES

In January 2018, Julien Denormandie, State Secretary Create a national third place to the Minister of Territorial structure to promote support Cohesion, entrusted the actions. Fondation Travailler Autrement with overseeing Support the birth of its Coworking Mission. Its 300 territorial hubs. objective was to evaluate the current situation to have a better national understanding Back the movement to a of the new economic situation seed fund which may be driven by third places and replenished by private funds coworking spaces, and in so to launch the acceleration doing, to propose concrete mechanism. measures and an action plan that would support their Professionalise third place momentum, particularly in facilitators. rural areas and medium-sized towns. This consultation resulted in Create an M€50 socially the publication of a report responsible investment in September 2018, which (SRI) fund to support the highlighted the possibility reconversion of spaces into of turning third places third places. into catalysts for local development. The mission Encourage public-private issued 28 proposals, including coordination by encouraging six main ones which constitute the provision of premises the backbone of the project: by regional authorities and providing third place training to public agents.

42 What kind of challenge for coworking? | Colliers International As a result of this mission, in third places between June 2019, the government metropolises and rural announced that it would areas. This, along with new invest in 300 spaces and online campuses, “Micro- projects, called “fabriques Folies,” (neighbourhood de territoire,” (territorial digital museums), digital hubs), which could in turn passes, etc. and two M€50 redistribute smaller spaces funds, the first allocated to to others. The government creating coworking spaces, is therefore counting on and the second one, managed solidarity between spaces by Amundi, who will be used for its plan to work. as a capital base for creating new third places. In total, The issue of geographical M€450 will be devoted to position was a determining the plan. one to equally share these

Colliers International | What kind of challenge for coworking? 43 REAL ESTATE SERVICES

Operator respondents often This service-driven aspect introduce themselves as is in fact highly appreciated hospitality industry actors, by coworkers: our survey highlighting hospitality codes showed that it comes second that are followed in their in the list of reasons to opt for spaces, such as concierge coworking. and other services. Much The provision of services like hospitality, these models also involves a notion rest on occupancy rates, and of customised services, companies no longer only becoming a way for some rent out square metres, but operators to set themselves also take out service provision apart from their competitors. contracts. The demand for customised spaces is increasing, especially as temporary employment businesses and large corporations are becoming more prominent clients. “ There are overlaps with hospitality and services.” Céline Leonardi, Director, Wellio “We are now seeing requests for customised spaces, offering users the possibility to The growth of coworking customise entire illustrates the transformation floors.” of real estate, which is Lawrence Knights, becoming a real tool serving CEO and Cofounder, users. Operators have fully Kwerk understood this and are positioning themselves as service providers, with an emphasis on user experience.

44 What kind of challenge for coworking? | Colliers International “Wojo’s ambition is to be both a key player Consequently, operator in workspitality, by Deskeo-Knotel focuses almost developing a network exclusively on providing its of unique experience- clients with turnkey furnished spaces. Other operators are enhancing work concentrating on customised environments enriched offers, such as WeWork and with services devoted to their brand Powered by We, enjoyment, performance, which offers turnkey spaces and connecting talents.” for companies outside WeWork network buildings. Farid Elomri, Sales VP, Wojo

KEY POINTS Two major operator models have emerged, and were the main drivers for opening sites in recent years:

Big international and national Actors who are developing a actors, whose strategy has more exclusive strategy focusing focused essentially on “bigger on specific, differentiating is better” and on rolling out identities (range, site locations, a network of sites, so their clientele, services, etc.). members can mesh.

Colliers International | What kind of challenge for coworking? 45 CONCLUSION WHAT ARE THE OVERALL TENDENCIES?

Long regarded as a limited and positions, but which share phenomenon mainly aimed a capitalistic approach and at freelancers and very whose locations are mainly in small structures, coworking big cities, particularly in Paris. has gained prominence Despite their differences, and become more widely these two markets are disseminated in the based on the fundamentals economic sphere. Now this of coworking, which can be highly heterogeneous and shape-shifting sector can be summarised by “CO,” for segmented into two major collaboration and community, markets: and “FLEX,” for flexibility. Indeed, coworking is part 1. the independent freelance of a movement aimed at market, corresponding to transforming the world of smaller spaces established work, where these aspects in both towns and rural are becoming crucial. areas. These belong to social They are translated by an and solidarity economy, the increasing attention to more aim of which is to provide collaborative workspaces places that encourage and by a growing demand interactions between self- for flexible work times and employed workers or very places. The collaborative small structures, and which La and flexibility qualities of Mission Coworking, launched coworking seem to have by the French government support from coworkers, who and driven by Fondation enjoy using shared space and Travailler Autrement, is welcome its optimised time supporting. management. By responding 2. the independent operator to these needs, coworking market, which carries most of has managed to spread its the sector’s growth and has user base to medium-sized quite a broad variety of actors and large companies, thereby

46 What kind of challenge for coworking? | Colliers International contributing to ensuring the At the centre of coworking, sustainability of the economic communities are probably model of large operators. the most difficult element to define. They are the The demand for coworking very basis of coworking, spaces has therefore become since they were created highly diversified, along with to encourage discussions, the motivations of companies. mutual support, and sharing The growth of this demand, experiences amongst self- particularly that of temporary employed workers. This employment businesses and specificity is still central to the large groups, has developed independent operator market, alongside more sedentary since it is essentially made spaces, with on one hand, up of community-seeking companies who commit over freelancers or very small several months, or even years structures. - while the original model was based on hourly, daily, As for the large operator or monthly memberships - market, community is still and on the other hand, a an important element of privatisation of workspaces their offering, participating for company employees. in their corporate identity. It manifests via a broad range Coworking operators are of tools and events offered increasingly seeking to stand to coworkers, although out by building a strong brand they are actually used only by creating a unique identity seldom or on an ad hoc basis. and retaining companies and Community is therefore less their employees in order to sought out in these spaces, limit very short commitments. where it is probably more They are focusing their difficult to create a sense of development on the provision community with a much more of services, coming closer diverse group of workers than to the hospitality model, with independent operators. and moving toward more Here, what stands out more customised offerings to attract than a community of interests long-term clients. is a social flavour.

Colliers International | What kind of challenge for coworking? 47 FUTURE DEVELOPMENTS

The coworking market is The growth driver for booming, with a sharp rise in coworking also involves the number of operators, and the opening of new sites, appealing to a broad field of including by large operators, users. The sector’s growth, in regional metropolises, which has been particularly as this market segment strong in recent years, should has until now remained continue, but probably at a quite concentrated on the slower pace. Coworking actors Ile-de-France region, and are testing and adapting particularly, Paris. existing models to meet the In Ile-de-France, with the demands of this broader delivery of Grand Paris clientele. The market should Express planned for 2025, therefore become more which will provide the territory consolidated in years to with a radial transportation come, gaining in maturity. infrastructure 1, coworking will WeWork’s setbacks have no doubt have a vital role to somewhat tarnished the play by becoming established sector’s image and raised in future transport hubs doubts over its future and and thereby participating in sustainability, along with an ecosystem of sites that questions should the real complement companies. estate market reverse its trend. To address these uncertainties, investors have a tendency to limit risks by diversifying the operators to whom they let out their buildings, dedicating a share of their portfolio to these coworking actors. Despite these uncertainties, coworking is part of a deep- rooted trend. It illustrates the current transformation of real estate, which is becoming more based on usage and more in sync with company demands.

1: Colliers International France survey: “Grand Paris, vers de nouvelles centralités”

48 What kind of challenge for coworking? | Colliers International Based on a prospective large urban areas, alongside vision of the evolution of the projected rise in self- the world of work by 20302, employed workers. Associated coworking could develop in with coliving, which are still in regional cities, responding their infancy, new coworking to the goals of employees to models could emerge over the move to regions, and outside next decade.

2: Colliers International France survey: “2030, l’Odyssée de l’espace de travail”

ACKNOWLEDGEMENTS

Neo-nomade, a solution published by LBMG Worklabs, to book a flexible office anywhere in France in just a few clicks, for sharing our questionnaire and letting us access their database of coworking space users for this quantitative survey. Coworking companies and operators who shared our survey online: Atos, Sogaris, Welkin & Meraki, Weréso, SceauxSmart, Cowork In. Cyril Aulagnon at Stonup, and Christian Ollivry with the Actipole 21 network, for sharing their knowledge and vision of the coworking market. Internal Colliers International France teams, who helped us contact coworking actors, such as managers and users.

Colliers International | What kind of challenge for coworking? 49 ABOUT Colliers International France

In a context of deep changes in the real estate market and evolving company landscape, Colliers International France imagines what company real estate will look like in the future, alongside and in service to its clients. We support our clients throughout the property value chain, from defining strategies to implementing projects. Our collaborative approach is defined around three main business lines: consulting, transactions, and project management. WORLDWIDE

€Bn3 REVENUE 17,000 EXPERTS 68 COUNTRIES

RESEARCH AND Research & Development Our Research Department is made up of a multi-skilled team (data and geomarketing specialists, urbanists and geographers) who analyse and interpret current territorial and real estate trends. Using spatial analysis and datamining techniques, our team contributes refined territorial knowledge and anticipates future real estate markets and opportunities. Our Research & Development team brings together researchers and experts in ergonomics, psychology, and work sociology. It investigates topics focused on analysing trends and on the impacts of new work environments, experimenting with new methods and tools in order to deliver the most expert support to our clients. Every year, our teams publish innovative surveys focused on four main themes: real estate, work performance and environment, prospecting, design. Our latest surveys are: Grand Paris, vers de nouvelles centralités, 2030 l’odyssée de l’espace de travail, Méthodes Agiles comment les environnements de travail soutiennent cette révolution, and Flex office, du fantasme à la réalité.

50 What kind of challenge for coworking? | Colliers International CONTACTs

Laurence Bouard Audrey Abitan Director of the Research R&D Manager Department [email protected] [email protected]

Other contributors

Marine Lamari Olivier Chanon Research Analyst Research Analyst

Nathalie Prinet Delphine Jamin Workplace Consultant Creative Director

Julia Hardouin Charlotte Girard Head of Marketing & Communication officer Communication

Colliers International | What kind of challenge for coworking? 51 COLLIERS INTERNATIONAL FRANCE 41, rue Louise Michel 92594 Levallois-Perret Cedex [email protected] +33 (0)1 73 01 21 00 www.colliers.com