Traditionally, serviced office operators took up space in core CBD locations, and coworking operators tended to locate in older buildings in decentralised districts or fringe CBD. However, over time, the two have come together and both now have good coverage across both building class, and location.
The most prominent change in this is the shift of coworking centres from CBD fringe areas to prime locations within the CBD and this, again, is end user led. You will usually find local operators in fringe districts, accommodating start-ups with international operators seeking CBD sites to accommodate multinational corporations. Regardless of whether the end user is a multinational corporation or start-up, proximity to clients is critical – as such, CBD locations will continue to be sought after due to the critical mass of corporate headquarters in CBD districts.
Larger floor plates with natural light are often sought by operators. Serviced office operators tend to look for buildings with a central core, while coworking operators prefer a side core. It very much depends on the operator in terms of building – Servcorp will usually only take AAA grade buildings in prime CBD locations, while WeWork typically take a large amount of space across all districts but rarely in AAA grade buildings in core CBD, and the Regus portfolio spans all building classes and districts.
In all cases, operators will seek market rent or below, meaning low zones of buildings tend to be targeted. Operators look to secure buildings on a pre-let basis, as this enables them to maximise the incentives offered by the Landlord. There is certainly a first mover advantage in taking buildings under construction on a pre-let basis as it helps maximise the aforementioned model.
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