- An astonishing 0.7% of offices in Africa are now co-working spaces.
- Shared workspace demand has been growing at a staggering annual rate of 21.3% propelled by remote and hybrid work schedules.
- Remote working is anticipated to increase by 158% in 2024 as claimed by market analysts.
Currently, there are over 15 notable co-working spaces in Nairobi namely;
- Nairobi Garage
- Knight Frank
- The Foundry Africa
- The Mint Hub
- Baraza Media Lab
- The Kijiji
- Nexus Co work
- Nomad Lounges
- WorkShop Serviced Offices
- UTU House
- Workable Nairobi
- and the list keeps growing
According to the global coworking growth study, shared workspaces are projected to reach 40,000 by 2024. This is primarily because of the work-from-home trend that started in 2020.
With a high variable cost of letting office spaces and the complexity in setting up businesses in the local market, international business owners and expats setting up shop are finding coworking spaces to be an extremely grounded solution.
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Why Are Co-Working Spaces Growing in Popularity?
If the ever-expanding portfolio of co-working spaces is anything to go by, then it is apparent that there is an increasing demand for shared workspaces backed by a myriad of reasons as described below:
Dynamic work schedules
Since 2020, most employers have begun offering employees the option to work from home, part-time or entirely. As a result, employees can now work from the comfort of their home for a few days each week or the entire tenure of their employment.
According to Hannah Clifford the director of Nairobi Garage, demand for co-working spaces has risen tremendously since the pandemic. More and more remote workers are looking for office spaces they can use when they need to work remotely from time to time.
Coupled with a lack of space in most households to set up an office and the distractions that come with working in a traditional family set-up, most people are opting to pay for shared workspace environments where they can focus a few hours of their day to achieve utmost productivity.
The current co-working space rent starts at a monthly fee of Ksh 10,000 per person compared to the price of renting an office, which will X-fold this amount. When setting up an office from scratch, you have to pay for licenses, office leasing fees, service charges, electricity, and other utility fees.
You also have to buy office furniture and gadgets such as a printer, shredders, and other items you need in an office. Thus, the amount of money needed to set up a conventional office is more expensive than renting a shared workspace. Furthermore, co-working spaces cater for all the licenses needed to run an office among other utility costs.
Renting a spacious office with enough space to have extra rooms such as a conference room will cost a pretty penny compared to a shared working space that offers the same amenities and much more at a fraction of the cost.
Location! Location! Location!
Most co-working spaces are located in high-end buildings within accessible parts of town that are easy to reach. Areas such as Westlands, a popular office location, also houses quite a number of co working spaces.
READ ALSO: Westlands Neighbourhood Guide
Are Co-Working Spaces a Good Investment?
Yes. Renting a furnished space allows you to charge rent as you surcharge clients for the additional services provided like meals. This money-making venture uses the shared economy model, which is similar to renting furnished apartments or Airbnb’s.
An average co-working space that accommodates 50 people, will translate to an income of roughly Ksh 500,000 per month going by the minimum rental charge for a desk of Ksh 10,000 as stated above. If you factor in the cost of renting out conference space and other amenities, the return on investment for co-working spaces is fairly good.
Will Co-working Spaces Still Exist in the Coming Years?
All signs point to yes. Co-working spaces offer a financial advantage to both the owners and space users. The owners get to charge extra for the extra services they offer in a fully furnished office while users benefit from the cost-effectiveness of having a fully furnished office without the heavy initial capital outlay.
Additionally, the demand for green workspaces with recreational space has led to setting up of co-working spaces in residential homes with a compound that offers users an outdoor space for outdoor working and coffee breaks.
Not to mention the benefit of having an office in an upmarket neighborhood at a fraction of the cost.
What is the Effect of Co-working Spaces in the Commercial Real Estate Industry?
If more remote workers seek co-working spaces and the demand increases, there is bound to be an increased demand for commercial spaces. This may help balance the current office glut as co-working space investors buy or rent more office spaces to set up new shared working spaces.
The growing demand for co-working spaces and the cost effectiveness of renting an already setup workspace has led to a mass exodus by companies from conventional office spaces in favor of a co-working environment.