Australia’s co-working boom moves from city to suburbs

As flexible spaces move beyond Australia’s capital cities into suburbs and regional areas, more Australians are moving to desks in co-working spaces.

Flexible Workspace Australia’s 2026 industry report shows that the customer base for flexible workspace extends beyond startups, small businesses and freelancers to include established companies.

“Coworking is no longer a phenomenon or a fad, but an established and expected way of working,” said the report published Thursday.

According to the report, based on a national survey of flexible workplace operators, industry data and expert input, desk wages have trended higher, available flexible floor space has shrunk significantly and operator sentiment is extremely positive.

As hybrid working and artificial intelligence integrate into businesses, the role of flexible space will expand further.

“We expect to see continued growth in suburban and regional markets, increased adoption by corporate organizations, and further innovation in how spaces are designed and adopted,” the report said.

Ophelie Cutier, the report’s main author and managing director of Perth and Sydney-based startup hub Spacecubed, has been in the flexible workspace industry for 14 years.

“The industry in Australia was definitely in its infancy when I started and there was huge growth before COVID,” Ms Cutier told AAP.

But many small businesses have not survived the pandemic lockdown, with half of all venues in Sydney and Melbourne closed.

The report revealed that the sector is recovering and growing again, although slower than before the pandemic.

“One of the trends we have seen over the last three years is that the allocation of flex space from landlords has doubled in the last three years,” Ms. Cutier said.

“So that’s a huge increase.”

The report also found that prices have normalized above pre-pandemic levels and remain resilient.

The average desk cost for a co-working space ranges from around $500 per person in central Hobart to $1000 per person per desk in Sydney’s CBD, although spaces outside CBDs are considerably cheaper.

“What I’ve noticed most is a real appetite for commuter and flexible co-working operators, and I love that because that’s an area we’re playing in,” said Jessie Grew, co-chair of Flexible Workspace Australia.

Ms Grew is also managing director of Wotso, which has 42 coworking centers across Australia and New Zealand.

“We are seeing more and more homeowners, especially in the suburbs and regions, looking to incorporate coworking into their assets because they are looking for that service,” he said.

“It has become like the gym, the child care center, or the coffee shop; it is needed as part of the genetic makeup of an entity because it helps bring people into the entity.”

Ms Grew said Wotso planned to expand to Bundaberg and Harvey Bay in Queensland and Orange in NSW.

“We think we have a really big impact in these areas because there is often a lack of purpose-built space for small and medium-sized businesses.”

Given higher fuel costs, large businesses are also looking to disperse their workforces and offer employees solutions closer to home several days a week, as well as a central CBD office.

The typical user of a coworking space varies slightly by location, with some of Wotso’s centers attracting plumbers and builders and others popular with tech workers.

An office for two to four people tends to be the most popular offering.

A major coworking player more active in central business districts, Hub Australia has well-known corporate clients including Fujitsu, Monday.com, Xero, Village Roadshow Pictures and Vanguard.

Although flexible workspaces make up only a small fraction of the 5.3 million square feet of office space in the Sydney CBD, they are starting to take hold.

Just over half, or 53 per cent, of five-to-10-person offices in Sydney are flexible workspaces, and more than three-quarters of one-to-four-person offices are flexible work spaces, the report said.

The report also found that most coworking spaces are used by local small businesses, as well as freelancers, remote workers and startups.

Companies accounted for about a third of tenants.

Brett McAllen, managing director of @WORKSPACES, which offers serviced offices in Melbourne, Brisbane and the Gold Coast, said demand had accelerated significantly from businesses of all sizes.

“We are seeing a fundamental shift in the way businesses think about office space,” he said.

“Long-term leases are seen as a liability.

“Businesses want world-class environments, but they want flexibility, control, and the ability to scale up or down without getting stuck.”

Workforces are more dynamic, teams are more dispersed, and business conditions are less predictable; Therefore, companies want to have the ability to respond quickly to changing business conditions.

“It’s about agility,” Mr. McAllen said.

“If your workspace fails to adapt, it becomes a limitation rather than an asset.”

Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.