Coworking Spaces Market Size, Share & Trends Analysis Report By Type (Corporate/Professional, Open/Conventional), By Application (SMEs, Freelancers), By Industry Vertical (BFSI, Professional Services), By Region, And Segment Forecasts, 2023 - 2030

Coworking Spaces Market Size & Trends

The global coworking spaces market size was estimated at USD 13.29 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 14.9% from 2023 to 2030. Coworking spaces gaining significant growth as technological improvements and the expansion of the freelance economy. This tendency affects the real estate sector, which includes landlords, developers, and real estate brokers, in addition to how individuals interact and collaborate with one another. Tenants are in greater competition than ever, and many are looking to the coworking concept and business model as an appealing, cost-effective, and adaptable replacement for traditional office space.

The traditional lease and rental office premises have seen a radical transformation with the emergence of coworking spaces. Landlords and service providers are capitalizing on the coworking concept to present a more appealing, flexible, and cost-effective alternative to traditional office space as the market for office space rents gets more competitive. The rise of remote work, a burgeoning startup culture, and a growing need for flexible office spaces are augmenting the market growth. As more people have migrated to remote work, COVID-19 has hastened the expansion of the coworking space business. The number of people working from home or remotely, as well as the creation of sustainable coworking spaces, are the key reasons driving the expansion of the market.

Furthermore, the growing number of freelancers and entrepreneurs is thought to be a major driver of the coworking spaces industry. Coworking revolves around communication and connectivity. Managing coworking spaces enables you to connect with a range of nearby companies and financiers. This raises the bar for membership plans and service quality. Effective teamwork and investment generate more revenue, add value for members, and generate new leads. Collaborations frequently prove to be cost-effective tactics that boost revenue as well.

Types Insights

The corporate/professional segment accounted for a substantial revenue share of 27.4% in 2022. Corporate and professional spaces offer dedicated desks, private offices, meeting rooms, top-notch furniture, cutting-edge technology, and other amenities to suit the needs of professionals and established businesses seeking a structured work environment. These types of spaces offer a more structured environment for businesses that need privacy and confidentiality, making them perfect for focus-driven settings like those needed by legal firms or financial consultants.

Enhanced productivity is among the principal advantages of business coworking spaces. Compared to traditional workplaces, collaborative workspaces encourage more inventive and creative surroundings, which boosts productivity. Workers can use shared resources that are only sometimes available in traditional office locations, like equipment and conference rooms. Coworking environments provide more flexibility, which raises employee satisfaction and retention rates.

Open coworking spaces provide a flexible setting that promotes networking among a variety of professionals and freelancers, entrepreneurs, and small businesses. Common features of these workspaces include open floor plans with shared workstations or tables next to lounges or cafeterias. Conventional office owners are incorporating coworking spaces into their developments through partnerships with well-known coworking space providers or by entering the market and starting their brand.

Application Insights

The large size enterprise segment led the market with a share of 27.3% in 2022. Large corporations are using coworking spaces, because of many advantages, such as affordability. These areas offer a chance to cut overhead expenses and stay away from long-term obligations. Large corporations take advantage of coworking spaces' flexibility and scalability instead of investing in their own dedicated office spaces. Companies are now opting for decentralized workplace strategies to ensure convenient commuting for employees instead of a single, large, central headquarters. Users have the freedom to choose workplace options that easily adapt to evolving business needs, allowing them to quickly adapt to changing market dynamics.

SMEs are expected to register the highest CAGR over the forecast period. The rise of coworking spaces coincides with the arrival of millennials into the labor force. People who were beginning their enterprises, launching startups, and combining smaller firms needed a suitable yet affordable workplace in which to collaborate, team up, and work. Coworking spaces can check all these boxes and more. The benefit of renting a shared workplace is that employees can rent desk space for as long or as little time as they require. Workers have the freedom to use shared workspaces on their terms, while businesses save money on commercial leases. Because SMEs are not tied down to office space, as is the case with leased offices, their office can expand as well.

Industry Vertical Insights

The BFSI segment held the largest revenue share in 2022. Major banks in various countries are choosing for and fueling the coworking space sector. The Royal Bank of Scotland, for example, is one of the main players that has chosen coworking space. Some employees are currently based in flexible workspaces at Edinburgh's Square, in a comfortable, roomy, open-plan office. It is designed not only for startups, entrepreneurs, and freelancers but also for RBS employees. The goal is to provide a stimulating work atmosphere in which new ideas can sprout and thrive, as opposed to the somewhat staid image banks that have existed for many years. The coworking area in Edinburgh offers a unique alternative to the bank's normal formal atmosphere.

Information technology segment is expected to hold a significant CAGR over the forecast period. Coworking spaces provide flexible terms and procedures that enable IT firms to scale their operations as needed. They allow for easy expansion and contraction of office space as projects and team sizes change, making them ideal for IT firms with dynamic and changing needs. Coworking spaces offer a cost-effective option by allowing IT firms to share the costs of facilities and amenities such as conference rooms, high-speed internet, and common areas with other businesses. This reduces overhead expenses and allows IT firms to devote more resources to key business activities.

Regional Insights

North America held a revenue share of 36.2% in 2022. The region has the most coworking spaces in terms of size, with an average of 9,799 square feet per site. The growing acceptance of flexible work techniques, service offices, and remote teams is driving the tremendous demand for coworking space, with coworking behemoths like WeWork and Regus managing 23 million square feet. This expansion is being driven not only by freelancers and start-ups searching for casual coworking spaces, but also by larger organizations looking to develop their business in a controlled and cost-effective manner. New York, Chicago, San Francisco, and Los Angeles, have all experienced more than 15% year-on-year growth in coworking spaces, with a total of 566 workspaces.

Asia Pacific is accounted to witness a significant CAGR over the forecast period. Cities in the region such as Hong Kong, Sydney, Singapore, and Tokyo have become coworking space centers. India is also seeing an increase in start-ups and SMEs, which is fueling demand for coworking spaces. With increased investments in start-ups and a growing population of independent freelancers and part-time employees, India has emerged as a developing market for coworking spaces. The Indian government has established policies and plans to help micro, small, and medium-sized firms (MSMEs) flourish, such as providing a large budget for MSMEs and lowering the interest rate on MSME loans. These initiatives are expected to further boost the growth of MSMEs in the region, thereby contributing to the expansion of the market.

Key Companies & Market Share Insights

Key players' significant initiatives for different coworking spaces are augmenting the market growth. For instance, in March 2023, The Great Room, a premium hospitality-led coworking space, opened its sixth coworking location in Singapore at South Bridge. With the growing need for hybrid workspaces, The Great Room provides one-of-a-kind coworking solutions to fulfill the needs of an ever-changing workforce. Offering contemporary venues and efficient services, as well as community-building initiatives and events, and a dynamic outlook on the future of work.

Similarly, in November 2022, Knotel, a Newmark-owned corporation, signed a long-term lease for 23,700 square feet at Ofizzina, an office condo project in Coral Gables, Florida. Knotel plans to complete three full stories of the sixteen-story tower at 1200 Ponce De Leon Boulevard. BF Group and TSG Group developed Offizina, a collection of 60 office condominiums.

Coworking Spaces Market Report Scope

Global Coworking Spaces Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global coworking spaces market report based on type, application, industry vertical, and region:

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Corporate /Professional

  • Open/ Conventional

  • Industry-specific

  • Others

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • SMEs

  • Large size enterprises

  • Freelancers

  • Others

• Industry Vertical Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • Professional Services

  • Information Technology

  • Real Estate

  • Recruitment

  • Healthcare

  • Government

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa