Co-working spaces emerge as creative option for commercial property investors

With demand for office space in the Melbourne CBD set to plateau over the next two years according to consultants Charter Keck Cramer and vacancy rates rising in other capital cities, office landlords will need to be increasingly creative to secure tenants.

One possibility is to consider turning unused office space into a co-working community space, as pioneered by the HUB Melbourne project at the bottom of Bourke Street in the Melbourne CBD.

Co-working communities are an open-plan office spaces which offer membership to mainly entrepreneurs and small businesses and provide not just the necessary business technology, but also a shared community to exchange ideas and innovations and work together where appropriate and mutually beneficial.

The community aspect is the principle difference between a co-working community space and renting a serviced office.

HUB Melbourne has the second highest membership in the world of any co-working community after San Francisco with a second HUB building under development on William Street on the Sydney CBD fringe and set to open in May.

HUB Melbourne was developed in 2011 and opened with 120 members. It now has over 700 members, all of whom are connected to a global community of 5,000 co-working HUB members on six continents.

It can be found on the top floor of Donkey Wheel House at 673 Bourke Street, a striking heritage-listed building dating from 1890.

The building was once the headquarters for the Melbourne Tramway and Omnibus Company with HUB Melbourne occupying the third-floor space, once a ballroom.

This includes the developing of tables, chairs and partitions placed on wheels to allow flexible configurations of space, lights constructed from recycled bicycle spokes wrapped in cardboard and extension cords bound in crochet. The space also incorporates velvet theatre curtains to section off work zones and absorb sound.

On any given day up to 60 people work at hub, some sitting at desks, others on couches and some in deck chairs as if they were at the beach.

There are no leases, no rental contracts and membership includes super-fast Wi-Fi, printing, tea and coffee, meeting rooms and a mailing address.

Individual monthly membership fees range from $200 per week for one day a week use to $600 for unlimited use.  One day casual passes can be purchases for $50.

Team of up to five can buy memberships ranging from $300 for one day a week membership to $2,000 for unlimited use.

Users of the space include fashion designers, architects and consultants.

The space was a designed by architects HASSELL in collaboration with HUB founder and CEO Brad Krauskopf.

HUB will also collaborate with Hassell on the fit out of the 500 square metre Sydney co-working space.

According to Steve Coster, principal at architects HASSELL who lead the team that designed the HUB Melbourne space, the concept of a workplace shared by a community of independent users or organisations that leverage social capital to create innovation and business opportunities.

“More than just a shared space or serviced office, co-working communities are focused on creating a network of mutually supportive relationships, connections and entrepreneurial opportunities among members,” he says.

He tells Property Observer, the growth of HUB Melbourne has been spurred on by an increasing prevalence of independent workers following the large-scale redundancies following the GFC.

As a result, there are many contractors or entrepreneurs, whose only other option is to work from home.

“Working at the HUB creates opportunities for referrals and collaboration with others,” he says.

In addition, he says the big corporates are also keen on the concept as a way for smart, innovative people to work in a space which promotes fringe ideas and allows the setting up of start-ups, and growing these businesses.

“For freelancer workers and small start-up organisations, co-working communities provide a community of like-minded individuals and relief from isolation. For large organisations, they provide an opportunity to access more dynamic, short-term, project based skills and capabilities,” says Coster.

According to Coster, the success of the community at HUB Melbourne is achieved through a range of mechanisms.

“Spaces must be authentic, welcoming, comfortable and meaningful for their members because they can only exist if people choose to pay to use them. With remote work on the steady increase, the value of desirable, meaningful places will only become more critical.

“The space has been designed to ensure a deep and genuine sense of ownership by users. It has also been designed to be easily reconfigured, as fast as the speed of business. Technological support is also crucial, provided through a ‘bring-your-own-device’ model, where network access and high-cost elements form a basic framework for rapidly changing technology platforms provided by the users themselves,” he adds.

This article first appeared on Property Observer.