Start-ups drive growth of flexible workspace in Brisbane

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 Start-up Muster Report.

According to the Colliers International Radar Report Brisbane Flexible Workspace: Market Trends and Outlook, as at May 2017 there is over 78,000sqm of flexible workspace across Brisbane, 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 (62,137sqm), co-working space (8,860sqm) and incubator space (approx. 8,000sqm) which is usually owned, financed and or managed by government and or not for profit, view the video here.

“The demand for flexible workspace is being driven by businesses seeking greater flexibility in tenancy size, lease terms and the ability to flourish with likeminded, often tech savvy and forward thinking entrepreneurs and small business operators,” said Joseph Dean, National Director of Office Leasing at Colliers International.

“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.

Colliers International Australia Flexible workplace report

According to the author of the report Helen Swanson, interstate consulting firms looking to start up in Brisbane are 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.

“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,” said Ms Swanson.

Jock Fairweather, Director of Little Tokyo Two, a co working based company, says they accommodate a wide range of companies to their co-working spaces in Spring Hill, Petrie Terrace, Springfield and The Capital in the Brisbane CBD.

“Recently, we have seen 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. Our expertise is supporting founding teams (1-2) and helping them grow to (6-8) and then move on from there.

“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.

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