The Coworking Sector Continues to Grow Across Europe

The Coworking Sector Continues to Grow Across Europe

updated April 14, 2019
The Coworking Sector Continues to Grow Across Europe

Coworking is not a new concept, but its fast growth in recent years has quickly disrupted global office markets. Cushman & Wakefield’s latest European Coworking Hotspot Index examines this rapidly evolving market segment, explores where the sector will expand next and asks, what does it mean for traditional office space?

Although coworking has spread into new markets, it’s still concentrated in the world’s largest cities. The flexible workplace sample is little over 1% of global office inventory, however, “coworking has piqued the real estate industry’s interest, not because of its current share of office space, but because of its potential to grow and change how people rent space in the future.”

About 40% of all coworking space is in North America and the rest is split evenly between Europe and APAC. Coworking in APAC has the highest share of the overall office stock at 2.1%. In Europe and North America, the share is around 1.0%. London and New York City have the largest amount of coworking space in the world with over 1 million sqm each. Alone, these two cities account for 22% of global coworking stock.

“London is Europe’s largest coworking market measured by volume of office stock (4.6%) leased by coworking operators.”

Research continuously supports the significant impact coworking has had on the London leasing market. WeWork is now the largest private office tenant. Leasing activity by coworking operators has ranged from between 10-20% of quarterly take up for the last few years, strengthening leasing figures considerably.

“There are more start-ups in London than in any other European city, but also more large businesses. Overall, London gives coworking operators an opportunity to target different user groups, experiment with formats and scale-up once they land on a successful idea.”

Cushman & Wakefield’s Hotspot Index predicts the path of growth of coworking in Europe by analysing 40 key cities based on the weighting of four factors: scale, business environment, people and catalyst. London comes out on top, with a ranking of 183, followed by Paris at 145. Stockholm, Dublin and Copenhagen follow Paris with respective index rankings of 139, 132 and 126.

Despite the variable dynamics in each market, it is clear that coworking in Europe isn’t slowing down anytime soon.