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The rise and resilience of coworking: A paradigm shift in work culture that's here to stay

The rise and resilience of coworking hero
Coworking has evolved over the past decade and even more so since the pandemic. What was once considered a "passing trend" in the office market for solotrepreneurs or startups, has evolved and accelerated to encompass companies of all sizes.

Prior to the pandemic, the coworking trend was already revolutionizing the work landscape, reshaping not only where and how we work, but also impacting the dynamics of office space supply and demand in Quebec and across Canada.

With the rise of the hybrid work model and a shift in conventional work habits, companies are embracing new ways of operating, placing greater importance on flexibility, convenience, amenities, and location. However, a fundamental driver behind the decision-making process for office spaces, be it traditional or coworking, is the intrinsic value of collaboration—the essential ingredient for fostering in-person networking, learning, and creativity.

Coworking and the modern hybrid era

In 2022, the coworking office market accounted for nearly 10% of office space leasing in major cities around the world, and it is going to keep growing and evolving. The demand for flex space at IWG's coworking brands has climbed by 40% since the pandemic, according to IWG's CEO for the Americas, Wayne Berger, who joined a recent Colliers Talks Podcast. In this episode, WeWork's Head of Sales for the Atlantic region, Nick DeMarinis, also expressed that their overall facilities demand has increased by 112% year-over-year.

Hedhofis, a Quebec-based coworking company, opened its first location on the South Shore of Montreal in 2017 and has since grown to 10 locations across the Greater Montreal Area and Quebec City, serving and adapting to the evolving workplace trends, including the growing demand for longer, more flexible terms, as well as dedicated corporate suites for larger users. as well as dedicated corporate suites for larger users.

“Hybrid work contributes to the overall success of coworking,” President of Hedhofis Frédéric Deshaies explains. “Today, we are delighted to see that more and more companies, some with as many as 50 employees, are embracing this new way of working. The success they are experiencing proves that coworking is suited to all types of companies, whatever their size or ambition."

The rise of flexible work in the suburban markets

In today's hybrid work landscape, the concept extends beyond the confines of traditional home and office settings. A new trend is emerging, wherein professionals are opting for coworking sites near their homes. This shift eliminates long commutes to bustling urban centres like downtown Montreal, but also offers a professional environment to conduct business and network with other people and companies. Hedhofis has capitalized on this trend by expanding into burgeoning markets such as Brossard, Lévis, Sherbrooke, and Ste-Thérèse, with plans for further expansion.

Flexibility has become a vital component in today's work landscape. By offering shorter commitments and the flexibility to explore different office layouts, locations, and team configurations, coworking companies like Hedhofis enable organizations to embrace the hybrid work model.

The demand for space at Hedhofis and other similar venues in the region is not only driven by marketing companies, tech startups, finance workers, and consultants, but also by larger enterprises seeking satellite offices in suburban areas to increase proximity to their workforce and align with the hybrid work movement.

The demand for flexible office space, including coworking, now represents approximately 8% of the total office inventory in Canada, according to Colliers' New Age of Hybrid Work report. As companies consider their future space needs, the growing demand for "flex space" or workspace outside of their core market suggests that coworking will occupy a larger proportion of the total office inventory going forward. This flex space can include shared designated areas within an office building, such as bookable boardrooms or multi-functional rooms. It can also refer to short-term leases of fully furnished spaces, as highlighted in the report.

Furthermore, 21% of companies surveyed said they would consider flex office space or coworking as part of their future space strategy, while approximately 33% remain undecided. This indicates ample untapped opportunities for additional coworking spaces in the future.

Embracing the changes in the workplace

Colliers Real Estate Management Services (REMS) recently asked roughly 500 Canadians who work in an office about what motivates them to work in the office instead of at home. Respondents indicated that certain activities or work situations were more suited for the office environment. For instance, meetings were felt to be more effective in person than online, or over the phone. Having a physical workspace facilitates brainstorming, idea generation, relationship-building, and knowledge sharing, all of which were identified as better accomplished in the office.

Office developers are also actively embracing community-oriented features, exemplified by Le Hub, an innovative office building scheduled to break ground this summer at 1711 Boulevard des Promenades in Saint-Hubert. This project will integrate collaborative common areas throughout the building, fostering a dynamic ecosystem for its tenants and prioritizing human connection and cooperation in the modern workplace, thereby promoting professional well-being.

At Ivanhoe Cambridge’s PVM Campus in downtown Montreal, an entire upper floor of 1 PVM has been designated for collaborative and flex spaces operated by WeWork. The space provides bookable flexible rooms, support staff, videoconferencing systems, and collaboration and social spaces available to all tenants of the building.

Simultaneously, we are witnessing a growing trend among traditional office landlords in Montreal that are leasing space to coworking companies as part of their strategic approach to address high office vacancy rates and revitalize their properties. By having a coworking firm as a tenant, landlords are diversifying the use of their spaces, safeguarding against downturns in specific industries, all the while cultivating a vibrant community within their buildings.

The advantage for landlords is also strategic. As the startups take scale, they can naturally expand into the building's traditional office suites and become long-term tenants for the landlord.

The untapped potential of coworking

Coworking has emerged as a prominent player in our office landscape, propelled to the forefront of our decision-making by the rise of hybrid work. As we delve deeper into its merits, we gain an understanding of the myriad of benefits it offers. Flexibility, adaptability, cost efficiency, and access to professional amenities and tools are just a few advantages that surpass what most home office environments can provide.

Yet, perhaps the most significant advantage lies in the sense of community and collaboration it fosters across diverse businesses and companies. During the pandemic, the commercial world faced a deficiency in genuine connections. The in-person, real-life interactions that coworking spaces offer hold tangible advantages that will continue to propel businesses forward.

Ashley Dere is an associate vice president and commercial real estate broker with Colliers in Montreal. Dere specializes in tenant leasing services.
 

Pour plus d’informations, veuillez contacter:

Ashley Dere

Associate Vice President

Montreal

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