Property occupation is a great proxy for changes in the general economy. No place better reflects the changes to the WA economy since the peak of the resources boom than the Perth CBD office market.
10 years ago, there were 2 floors of vacant office space in the old Woodside building (240 St Georges Terrace), and this was a rarity. Fast forward to today, there is now (Over 400,000 sq m) the equivalent of over 10 old Woodside buildings vacant across the CBD.
This level of vacancy has largely been driven by downsizing in the resources sector and their project partners. For example, the amount of office space occupied by iron ore firms in the Perth CBD decreased by nearly 40% between 2012 and 2019 as the number of iron ore firms decreased from 45 to 12.
Amid the challenging economic conditions, a number of sectors have emerged as new drivers of office space occupation. These sectors represent the property industry version of S.T.E.M.M.(Science, Technology, Engineering, Maths and Medicine) – shared work spaces, technology firms, education providers, medical practitioners and media/marketing and PR firms. Since the peak of the boom, these sectors have nearly doubled the amount of space they occupy in the Perth CBD. In total, these industries now occupy just under 10% of occupied office space in the Perth CBD.
Shared Work Spaces in the Perth CBD and beyond
Shared work spaces, defined as either serviced offices or coworking spaces, have become an important and growing part of office markets around the globe.
Technology is making it easier to work from anywhere and find clients across the globe. Shared work spaces have grown based on their ability to offer workers and companies a quick, flexible and cost-effective alternative to leasing their own premises or working from home. Much like other pillars of the sharing economy, shared work spaces offer people the ability to use space on demand. Users range from casual, daily users to long term occupants of over 10 years.
Coworking space includes the more traditional service office operators (suit and tie type clientele) as well as coworking operators (suit and sneakers type clientele).
The growth of Spacecubed (FLUX and Riff) is emblematic of the growth of the shared work space sector since 2012. Spacecubed opened as the first coworking facility in the Perth CBD, attracting 50 members by the end of the year. In 2019, Spacecubed has grown into two facilities servicing over 2,500 members.
At the heart of the growth of Spacecubed, and successful shared work space operators across the globe, is the communities they service. With so many choices to work from given the level of vacancy and improved technology, what has become apparent is that operators must offer more than just a desk. Their value is the interactions they facilitate either through events or day to day operations. Shared work spaces by their nature rely on sharing – space, information such as this blog but, importantly, the success of other members.
I recently sat down to speak to the godfather of coworking in WA, Spacecubed founder and Managing Director, Brodie McCulloch, for my podcast, Office Hours, part of the Business News podcast network. Recording in the new podcast recording studio at Riff, we cover a range of topics including:
The evolution of Spacecubed.
Who uses shared work spaces?
Global innovations adopted in Riff and Flux.
The importance of community and offering more than a desk in shared work spaces
The likely impact of new shared work space operators opening in Perth
The potential for Spacecubed to open in the suburbs.
You can listen to the latest episode of Office Hours with Damian Stone, featuring Brodie McCulloch here.
If you're interested in joining a coworking space that cares about you and your business, book a tour with Spacecubed to get started.
