Flexible workspace in Brisbane has experienced significant growth and demand over recent years from local, interstate and international businesses who are opening new operations across CBD and fringe markets.
Queensland has now overtaken Victoria in terms of numbers of start-ups and has the second largest number in the nation, behind New South Wales.
According to the Colliers International Radar Report, Brisbane Flexible Workspace: Market Trends and Outlook, there was over 78,000 square metres of flexible workspace across Brisbane in May this year, representing 2.43 per cent of the total office market. In comparison, Sydney represents 2 per cent of the market.
Flexible workspace in Brisbane consists of serviced offices (62,137 square metres), co-working space (8,860 square metres) and incubator space (approximately 8,000 square metres) which is usually owned, financed and or managed by government and/or not for profit.
“The demand for flexible workspace is being driven by businesses seeking greater flexibility in tenancy size, lease terms and the ability to flourish with like-minded, often tech savvy and forward thinking entrepreneurs and small business operators,” Colliers International National Director of Office Leasing Joseph Dean said.
“But it is not only the start-ups or small operators that take up the space. We see corporates and large companies also looking for alternative workspaces to grow some of their departments that can benefit from collaboration.
“The majority of the activity is in the CBD, where 58 per cent of the flexible workspace is located, but interestingly there has been a rapid increase in serviced offices and co-working space throughout the Fortitude Valley and Southern fringe precincts.
“In terms of the building grade, 60 per cent of the flexible workspace is housed in the secondary grade buildings across the CBD and fringe markets.
“However, there are some fantastic examples of heritage space being meticulously renovated and repurposed as witnessed at T.C. Beirne Building (incubator space backed by the Queensland Government) and Plumridge House (serviced offices) in Fortitude Valley,” Mr Dean said.
Helen Swanson, who authored the report, said interstate consulting firms looking to start up in Brisbane were attracted to the flexible lease terms and sizing arrangements that flexible workspace offers.
“Small Business Labs, an organisation that monitors co-working space around the world, suggests that the number of people renting flexible workspaces will grow globally from just under 1 million in 2016 to nearly 4 million in 2020," she said.
“From a local perspective, the latest Start-up Muster Annual Report (2016) shows that Queensland has increased its share of Australian start-ups from 16.5 percent in 2015 to 19.3 percent in 2016.
“Federal initiatives expected to support the growth of the sector over the coming years include: backing innovation and FinTech, extending crowd-sourced equity funding; and tax advantages to support investment in start-ups,” Ms Swanson said.
Jock Fairweather, Director of Little Tokyo Two, a co-working based company, said there has been an influx of 30-35 year old’s who have worked in a corporate vertical for some time and are wanting to leave and start something for themselves in the same vertical.
“The number of new co-working and serviced office groups is certainly rising.
"However, the focus for most operators is space rental rather than quality of service. The trouble with playing the space rental game is that small operators will always lose out to the larger players.
“For example, WeWork’s fit-out budget is up to 10 times larger than smaller operators. Therefore, if your only offering is space, you can’t win.
“Consequently in the next three years the market will sort out the good from the mediocre. Only those that offer quality service and support will be successful,” Mr Fairweather said.