Coworking in Melbourne, dead or thriving?

At the forefront of the minds of many who work and enjoy the lively environment and facilities that coworking spaces are known and loved for, is the question, will coworking places survive this pandemic?

The answer to this question so many of us are praying for is of course yes. However, with so many variables to consider, it is difficult to determine the outcome of this previously thriving industry.

Whilst some outcomes are inevitable and obvious, such as a probable halt to new coworking spaces in development for the here and now. Other answers seem to be far more complex. It seems with current social distancing rules and the desire of many to remain in the safety of their home, the energy of many has been redirected into creating a productive work environment within their own home. However, it goes without saying that once things pass many will be itching to return to a luxurious coworking environment like the many coworking spaces Melbourne has to offer.

The main concern is without tenants during this period of prolonged, relaxed lockdown, will coworking offices in Melbourne have the cash flow to survive, and can they compete with the reduced rents that are being observed on the usual office rental market. The answer to some spaces is inevitable NO. However, the changes many businesses are currently experiencing due to the unusual changes to demand, certain businesses during this time will result in changes in the size of teams. Event and travel companies are reducing staff to survive, whilst businesses involved in IT, as well as delivery services, are experiencing unprecedented demands and are looking to temporarily expand.

This brings us to the silver lining for coworking as we progress outside of this pandemic...

Every business is impacted in some way, this means change.

Every business in Melbourne will have felt the effect of the pandemic, some have benefited whilst other Melbourne businesses have suffered. This has had a range of implications for the operations of businesses and the way they are currently approaching office space.

The uncertainty this pandemic provides for the demand of many businesses means that now more than ever businesses are wary of being locked into long term contracts, a necessity for obtaining traditional leases. This means that as their team shrinks and their leases end many may opt-out of traditional offices and turn to coworking spaces which will allow them to add offices as their business begins to grow again as demand picks up. Of course, this is great news for coworking spaces in Melbourne that are able to sustain their operations through this pandemic.

An additional thought that should be acknowledged is that for businesses that have been favoured by this pandemic, coworking spaces are the perfect solution for their temporary expansion. With the knowledge that following COVID-19 demand will regress back to normal, they acknowledge that their team will need to be reduced back to its original size. Fortunately, coworking spaces provide the perfect solution to the temporary need for additional space allowing for the relocation of certain teams in coworking offices whilst other teams grow. This, of course, is not a new concept, but given the vast variation in demand for certain businesses during this time it is now becoming a more popular option than ever.

Will more people and businesses choose to continue working from home offices?

There will certainly be people who prefer the home office lifestyle, and will likely continue to work from home well past the other side of the pandemic. However, for many working from home is far less than practical, many struggles with poor internet speeds, noise from neighbours and construction, a lack of division between work and relaxing time resulting in a huge reduction in productivity as a result.

The other option of course is for companies to move to a mixed-method where every second day is an office day. This is great news for coworking spaces who can accommodate this office/home office lifestyle at a minimum cost. Additionally, many coworking spaces offer a range of meeting rooms for businesses, which are paid for just when they are used.

For those who do choose to remain working from home, there is still a need for a premium business address. These can be easily obtained through coworking places. Their official name is 'virtual offices' with certain packages even offering meeting room use and of course mail collection.

Will coworking membership prices go up?

The best news for coworking members is that the price of memberships will likely decrease for some time during 2020 and into 2021. This will be done to compete with reductions in traditional lease costs and other incentives struggling landlords implement to draw people into long term leases. However, prices will likely eventually return to normal.

In conclusion

Your beloved coworking places are here to stay. Change is inevitable. Hopefully, this means that coworking places will only get better.