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The Coworking Spaces Market size is estimated to decline by USD 27.70 billion, at a CAGR of 17.17% between 2023 and 2028. 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.
Market Forecast 2024-2028
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Coworking spaces are increasingly recognized as a beneficial workplace solution for enterprises and SMEs segment. 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 enterprises and SMEs segment accounted for USD 6.67 billion in 2018. 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.
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.
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APAC is estimated to contribute 38% to the growth by 2028. 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.
Moreover, the APAC region, including India, is experiencing a 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.
The market is witnessing a demand, 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 space, catering to the needs of workers, firms, franchises, 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.
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.
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.
Moreover, 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.
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.
However, 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.
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:
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.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.
Technological improvements are reshaping the real estate players landscape, particularly in the office space sector. Corporate and large size enterprise segment companies are increasingly opting for professional co-working spaces and open space providers to meet the evolving needs of the gig economy and professional segment. The information technology segment drives this transformation with technology integration, including VR and AR technologies, to enhance amenities like high-speed internet, meeting rooms, and office equipment. Utilities and administrative support services are being optimized to support these changes. Accelerator partnerships offer mentoring and funding opportunities, benefiting CXOs and large enterprises. Additionally, sectors like IT and Telecom, mobile and entertainment, travel and hospitality, and healthcare and life sciences are leveraging these advancements to refine their business model and meet diverse needs in the modern workspace. Tenants are increasingly moving away from traditional office space in favor of professional co working spaces, which offer benefits such as high speed internet and flexible working environments.
Market Scope |
|
Report Coverage |
Details |
Page number |
164 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 17.17% |
Market growth 2023-2027 |
USD 27.70 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
14.88 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 38% |
Key countries |
US, India, UK, Germany, and Spain |
Competitive landscape |
Leading Companies, Market Positioning of Companies, 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 growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market 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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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