Coworking Spaces Market by End-user, Type, and Geography - Forecast and Analysis 2023-2027

Coworking Spaces Market Forecast 2023-2027

The Coworking Spaces Market size is estimated to decline by USD 14.12 billion, at a CAGR of 11.23% between 2022 and 2027. The growth of the market depends on several factors, including the advantages, supportive government programs and policies promoting small-scale businesses, and the constant growth of start-ups in developing countries. Significant market growth is underway, fueled by the thriving freelance economy and the dynamic real estate sector. Such work environments serve a wide range of clients, from entrepreneurs to freelancers and remote workers, offering a fresh approach to conventional office arrangements. As hybrid work models gain traction and remote work becomes more desirable, coworking spaces emerge as flexible and economical substitutes for traditional leased office spaces.

What will be the size of the Coworking Spaces Market During the Forecast Period?

Market Forecast 2023-2027

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Market Segmentation by End-user, Type and Geography 

This report extensively covers market segmentation by end-user (enterprises, SMEs, freelancers, and start-ups), type (conventional coworking spaces, professional coworking spaces, and others), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

End-user Segment Analysis: 

Coworking spaces are increasingly recognized as a beneficial workplace solution for enterprises and SMEs. Small-scale businesses are embracing the flexibility provided to accommodate their expanding and diverse workforce. Compared to traditional office leases, they offer higher flexibility, driving the growth of this market segment. SMEs play a crucial role globally, representing about 90% of businesses and 50% of employment, according to The World Bank Group. In emerging economies, SMEs contribute significantly to GDP and job creation. As the demand for employment is expected to increase by 2030, the development of SMEs becomes essential for governments worldwide. They are gaining popularity among enterprises and SMEs, with millions of individuals working in thousands globally in 2021. These factors will fuel the growth of SMEs and subsequently increase the demand in the forecast period.

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The global landscape of start-ups and freelancing businesses is witnessing continuous growth, fueled by several key factors. One such factor is the rising support from governments, who are implementing initiatives and policies to encourage entrepreneurship and innovation. Individuals, driven by a strong inclination to bring their creative ideas to fruition in the global marketplace, are actively participating in the start-up ecosystem. Additionally, a thriving desire for success at both national and global levels serves as a powerful motivator for aspiring entrepreneurs. This convergence of government support, entrepreneurial mindset, and the pursuit of achievement has created a fertile environment for the proliferation of start-ups and freelancing businesses, leading to their constant expansion across the world.

Type Segment Analysis:

Based on type, the market has been segmented into conventional coworking spaces, professional coworking spaces, and others. The conventional coworking spaces segment will account for the largest share of this segment. Traditional or conventional coworking facilities are characterized by their smaller size, typically spanning no more than two floors. The allure of these spaces lies in their vibrant and inclusive culture, which is easily nurtured due to the proximity of individuals working together in the same location. The close-knit environment, coupled with networking opportunities, fosters a sense of community, facilitates collaboration among teams, and encourages meaningful connections. Traditional spaces are known for their diverse forms, sizes, and locations, as they are often not professionally designed. Examples of well-known traditional spaces include TheFarmSoHo in New York, Ministry of New in Bombay, and Workhaus in Toronto, all of which offer flexible desk or office rentals on a daily, weekly, or monthly basis.

Regional Analysis

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APAC is estimated to contribute 37% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.  

The market has seen significant growth in recent years due to the emergence of start-up ecosystems, increasing demand for flexible workspaces, and advancements in technology. In the Asia-Pacific region, cities like Hong Kong, Sydney, Singapore, and Tokyo have become hubs. India is also experiencing a rise in start-ups and SMEs, driving the demand. The government has implemented supportive policies, including financial assistance for MSMEs. These factors are expected to propel the growth in the region.

The APAC region, including India, is experiencing a surge in the number of start-ups and small and medium-sized enterprises (SMEs), which will drive the demand in the coming years. India, in particular, has emerged as a growing market, supported by increased investments in start-ups and a growing population of independent freelancers and part-time employees. The Indian government has implemented policies and schemes to support the growth of micro, small, and medium enterprises (MSMEs), such as allocating a substantial fund for MSMEs and reducing 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.

Market Dynamics and Customer Landscape

The market is witnessing a surge, driven by the flourishing freelance economy and evolving dynamics in the real estate sector. With remote work gaining momentum, freelancers, entrepreneurs, and the millennial generation increasingly favor flexible work environments over traditional office spaces. This trend has led to the rise of coworking spaces, catering to the needs of workers, firms, and lone contractors alike. As hybrid work models become the norm, developers, landlords, and real estate brokers are capitalizing on the demand for lease and rental office premises. Furthermore, economic and political stability, coupled with tax incentives and venture capital investment, are attracting foreign investors to participate in the startup culture and support the growth of coworking spaces. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.     

Key Market Driver - Burgeoning freelance economy and the dynamic real estate sector

The market is experiencing remarkable growth, driven by the burgeoning freelance economy and the dynamic real estate sector. These spaces cater to a diverse clientele, including entrepreneurs, freelancers, and remote workers, providing an innovative solution to traditional office setups. With the rise of hybrid work models and the increasing appeal of remote work, coworking spaces offer a flexible and cost-effective alternative to lease and rental office premises. They foster a collaborative environment where developers, real estate brokers, and startups can interact, exchange ideas, and form valuable connections. Moreover, coworking spaces provide economic and political stability, attracting foreign investors and venture capital investment. By offering tax incentives, grants, and access to startup incubators, they support the startup culture and facilitate entrepreneurial growth. With their ability to lower real estate costs, offer flexibility, and promote collaboration, coworking spaces are poised to drive significant market growth in the forecast period.

Significant Trends- Growing inclination toward technology-driven management

The adoption of technology is constantly growing across the globe. Therefore, coworking space operators are diverting their expenses toward technology-driven management solutions, such as coworking space management software, visitor management systems, appointment scheduling software, and resource management systems.

The operators are embracing the Internet of Things (IoT) landscape to make their businesses and infrastructure smart. The adoption of IoT-enabled key cards, Wiegand cards, proximity cards, and magnetic stripe cards are growing globally. Hence, these factors will enhance the growth of the market during the forecast period.

Major Challenge- Limited space and availability of limited equipment

Limited space creates a hindrance to requirements like privacy, creativity and innovative ideas, and one-on-one discussions. The lack of privacy in such spaces leads to employee dissatisfaction and unproductivity. Furthermore, meetings and video calls become difficult in such limited spaces owing to the presence of background noise. 

Other than limited space, insufficient equipment is another major challenge faced by workers. In some business needs, multiple monitors and phones are a prerequisite. However, they offer limited equipment. Therefore, it becomes difficult for workers to reach their daily work targets with the limited availability of the equipment. Therefore, such challenges could impede the growth of the market during the forecast period.

Who are the Major Coworking Spaces Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Betahaus GmbH - The company offers coworking spaces which include 36 private offices, 4 event spaces, and a rooftop terrace.

Blink Roppongi LLC - The company offers coworking spaces such as Blink Roppongi, and Blink Kioicho.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market players, including:

• Boxer Property
• CIC
• Convene
• Expansive
• Firmspace LP
• Greendesk LLC
• Impact Hub GmbH
• Industrious
• Knotel Inc.
• MESH cowork LLC
• Regus Group Companies
• Servcorp Ltd.
• Spaces Holding BV
• Synergy Office Spaces
• The District Coworking and Flex Office
• Unicorn Workspaces GmbH
• United Franchise Group
• WeWork Inc.

Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-User Outlook 
  • Enterprises
  • SMEs
  • Freelancers
  • Startups

• Type Outlook 
  • Conventional coworking spaces
  • Professional coworking spaces
  • Others

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Argentina
    • Brazil

Market Analyst Overview

The market is experiencing rapid growth, driven by various factors, including the rise of remote work, startup culture, and the freelance economy. These spaces offer flexible business models catering to diverse end user categories such as developers, firms, and lone contractors. With the integration of advanced technology, coworking spaces provide key benefits for stakeholders, including startup incubators, venture capital investment, and foreign investors. They foster economic and political stability by promoting sustainable co-working spaces and attracting millennial generation workers. The partnership between real estate players and open space providers contributes to the market's revenue contribution across industry vertical categories. As remote workers continue to increase, the demand for coworking spaces is expected to grow, shaping the future of the real estate sector and workspace industry.

The market is witnessing substantial growth driven by evolving business models and hybrid work models. Catering to diverse end users, including startups, freelancers, and traditional office spaces, coworking spaces offer flexible lease and rental office premises to accommodate varying needs. Factors such as the rise in remote work, product launches, and tax incentives contribute to market expansion. Real estate brokers play a pivotal role in connecting landlords with tenants seeking office space. Coworking spaces, categorized by region and business model, provide essential services and utilities to support operational efficiency. As the number of people opting for remote work increases, the demand for coworking spaces surges, offering a conducive environment for collaboration and productivity amidst changing work dynamics.

Business model categories, Region categories, Startups and freelancers, factors influencing them, remote work prevalence, regional distinctions, startup and freelancer participation, incentives like tax breaks and grants, startup nurturing through incubators, and conventional office spaces collectively shape the modern business landscape.

Coworking Spaces Market Scope
Report Coverage	Details
Page number	159
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Decelerate at a CAGR of 11.23%
Market growth 2023-2027	USD 14.12 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	14.05
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 37%
Key countries	US, India, UK, Germany, and Spain
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	betahaus GmbH, Blink Roppongi LLC, Boxer Property, CIC, Convene, Expansive, Firmspace LP, Greendesk LLC, Impact Hub GmbH, Industrious, Knotel Inc., MESH cowork LLC, Regus Group Companies, Servcorp Ltd., Spaces Holding BV, Synergy Office Spaces, The District Coworking and Flex Office, Unicorn Workspaces GmbH, United Franchise Group, and WeWork Inc.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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