Co-working: Experimenting with different models

 In Real Estate, Startup Thought Leaders

Since collaborative workplaces are different from regular office space, companies are experimenting with various models to provide a broad range of options to professionals. Away from cubicle culture and isolated office cabins, a co-working space is more like a buzzing cafeteria or a lively city pub where professionals come to work as well as socialize.

While some companies are only dealing in providing co-working spaces, others have ventured into hybrid models, which not only offer shared spaces but also give out private leased office space. Some companies are even diversifying into incubators for I-T and FinTech start-ups. Reports suggest that large financial institutions such as Accenture, People’s Bank of China and Commonwealth Bank of Australia have started providing incubator space to start-up companies. It allows their employees to interact with new and emerging ideas and keep them up-to-date with the latest in the finance sector.

The success of some of the companies that have pioneered in creating co-working spaces like the US based company WeWork, whose valuation stands at $5 billion today, has emerged as a role model for all big and small firms.

According to several reports authored by real estate consultancy firms, there several types of co-working spaces and models that have emerged over the past few years.

Collaboration between Property owners and operators

This is the most popular model in which a property owner leases out his/her space to a company, often called an operator, which further smartens up the area by creating pleasing interiors, the internet and wifi connectivity and all other amenities a professional requires to work and mingle with others.


The concept of sharing office space became popular when in 2008 during the economic slowdown a lot of companies shut their operations, and professionals went jobless. From regular employees, many of them became freelancers or consultant with no offices to work. They found working from home monotonous and de-motivating.

To liven up their work and social life, these professionals chose coffee shops where they used to work and make new friends. It was around that time when start-ups like WeWork noticed the changing trend and came up with an out of the box solution ? Workspaces exclusively designed for consultants, freelancers and employees of the start-up firms.

These operators go on collaborating with other landlords in different cities and become sharing-economy startups like Uber or Airbnb.

Another factor that worked for these operators was the rise of the start-up firms. Since these companies were founded with seed capital and they couldn’t afford large offices, the concept of collaborative workspaces suited their need and suited their budget.

So operators have tied up with property owners and taken their spaces on rent to spruce up according to the taste of enterprising professionals. These players give membership on a daily or monthly basis to freelancers. The same model has been adopted by European and many Asian countries.

Property owners venturing into co-working business

In another model, which exists mainly in some Asian countries like Singapore, Honk Kong, and India, some property owners, instead of leasing out their spaces to operators, have themselves jumped into this business. Such model is rarely seen in European and American countries. This is due to cultural differences, say experts. Since people in Asian countries are more conservative than their Western counterparts, many of them are not receptive to the model followed in western countries.

Instead of leasing out their spaces to operators, they play the role of operators and rent out their spaces to professionals, start-up firms, and companies. However, experts don’t see this as a successful model because they believe that co?working is less about physical space and more about atmosphere and services.

Companies creating co-working spaces

A report by JLL suggests another model of co-working in which companies create co-working spaces for their employees as well as for professionals of other organizations. This model can be sub-divided into four core models which are

(a) Internal Collaboration: Internal coworking space for employees only;

(b) Coworking membership: External coworking membership for employees;

(c) External coworking space: Collaborative space for employees shared with other individuals; and

(d) Internal coworking space: Permission to external individuals to come and work.

All these models have their strengths and weaknesses. While Internal collaboration has the benefits of internal collaboration, efficient space utilization, flexibility, ease of implementation and secure environment, it runs the risk of limited exposure to external collaboration.


Similarly, Coworking membership has the advantages such as ease of implementation, flexibility, mobility and lower initial outlay cost; it carries the risk of limited control over the use of space, security concerns and proximity to competitors.

The third model, i.e., external coworking can help companies with innovation, proximity to talent, collaboration, knowledge sharing, and flexibility, it poses the challenge such as benefits tend to be confined to departments or individuals exposed to this way of working, cultural dichotomy and breach of confidentiality/security.

As far as the fourth model of Internal coworking space is concerned, it too has its pluses and minuses. For instance, while internal coworking space comes with positive features like full control over design and management, flexibility, innovation, collaboration, knowledge sharing and access to talent, its disadvantages are a breach of privacy, operational complexity, a clash of corporates and entrepreneurial culture.

“Coworking which is imposed from the top down without due consideration of the user or employee experience is unlikely to yield the benefits most companies are seeking,” says the JLL report.


While the realty sector is still experimenting with collaborative space, one can expect many more models to emerge, and companies are vying with each other to attract as many professionals as possible. The ongoing trend suggests that for companies dealing with co-working spaces, it would be more important to experiment with services, offers, and atmosphere rather than the physical space.

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