The area of shared offices in Prague will grow by 66% year-on-year. At the end of 2017 the total area was 16,500 sqm, and in 2018 it will increase to 27,500 sqm as the market delivers 11,000 sqm. The majority of these centres have been pre-leased. Shared offices are used in the regions as well. There are 76 coworking centres across the Czech Republic with a total area in excess of 25,000 sqm. According to Cushman & Wakefield’s estimates, the current area of shared offices will double by 2020.
The first coworking centre opened in San Francisco in 2005. In the Czech Republic, COFICE opened the first shared office premises in 2009. Currently, there are 43 shared office centres in Prague, and we will see them grow significantly this year. Three out of eight centres have already opened this year: Coworking Port in Prague 8, and Work Lounge plus another operator in Prague 1. Slated for opening in 2019, Scott & Weber’s Praga Studios with a total area of 1,350 sqm is one of the projects with the largest amount of new shared office space. HubHub at Na Příkopech 14 with a total area of 2,000 sqm will open this June. The Visionary project will deliver the greatest area with 4,700 sqm and will house Business Link. Its opening is planned for July 2018.
“Shared offices have become a phenomenon in recent years, primarily thanks to their flexibility, cost effectiveness, and the possibility for networking. All that prospective members need is club membership, which allows them to use a currently available office unit at any time and for any period of time. Most of the offices have open-space floor plans, and they always include common areas, which account for 10%–20% of the total area and are accessible to all members to share their ideas and contacts or offer each other services. Members can also get together for local educational events, business seminars, and mentoring,” says Radka Novak, Partner and Head of the Office Agency Team.
When it comes to the users of shared offices in the Czech Republic, freelance traders prevail with 62%. Corporate entities also use the concept (24%) when their employees travel abroad and need suitable working space; often, they also often hunt for new employees or innovative ideas there or afford their existing employees more flexibility and a creative environment in pursuit of retaining the highest talent. The big corporate names that use coworking include Microsoft, Accenture, Amazon, Google, Dell, Samsung, HSBC and Volkswagen. Initially, the largest group start-ups account now for only 14%. Shared offices help them to mitigate the risks associated with traditional offices, which involve long-term lease agreements and operational costs. They also give them flexibility for expansion.
“Each target group usually requires a different interior concept, and this holds true for office space too. As a result, most coworking centres offer open-space as well as separate offices, the demand for which is growing slightly. The trend is one of differentiation, aiming to provide ‘to each his own’. The overall interior design depends on the coworking centre operator. Their greatest concern is originality – being as different from the competition as possible,” says Marie Vlčková, Head of Design at Cushman & Wakefield.
Only 40% of all coworking centres across the globe generate a profit. This applies to Prague too, with the average price for the lease of an office space being CZK 3,600 per month and CZK,300 per day. Profitability grows with the area of the shared office and its age as well. The more members a centre has and the longer it has been on the market, the better its financial performance. A full 40% of all coworking centres in Prague are sized 150 sqm or smaller. Shared offices larger than 1,000 sqm account for no more than 10% of the total stock. The present trend is to expand the areas, so we can expect the current figures to change in the future.
Regus is the biggest coworking centre operator in the Czech Republic, using 6,430 sqm of office space. Business Link holds the second biggest share with 4,700 sqm. The rest of the market is divided between InnoCrystal, Work Lounge, HubHub, Impact HUB, Scott & Weber, K10, PaperHub and Node5. The world’s biggest operator is We Work. It is not present in the Czech Republic yet, but its arrival is expected, as is MindSpace, Betahaus and Talent Garden. Hotels are also starting to offer coworking space as part of their existing premises.