March 2019

The Coworking Europe Conference 2019 is heading to Warsaw on November 13-15th for its 10th edition. In order to get to know the local ecosystem, we have interviewed Konrad Szaruga and Natalia Kuliberda, both real estate experts who have shared with us their experience, thoughts and insights about the polish market.

Can you introduce yourself and tell us about your past and current involvement in the coworking fields?

Konrad Szaruga: “I have 10 years experience in commercial real estate market from Developer followed by 5 years of experience in advisory firm – CBRE representing Tenants and Landlords to coworking which started in managing NewWork Offices in Poland followed by Business Development for Business.Link.

NewWork Offices is Hungarian based coworking network, available in Central Eastern Europe. In 2017, I was responsible for opening Polish branch of the organization, and managing it first coworking site in Poland – NewWork Wilanów in Warsaw with area of 3200 sqm.

After that I’ve joined Business Link in the beginning of 2018 and was responsible for setting up new strategy for the brand and acquiring clients for newest developments of the brand. Business.Link is the largest polish coworking operator who grew up rapidly after joint venture with the real estate company Skanska.”

Natalia Kuliberda: “During over 7 years of experience in real estate industry, I went through the full spectrum of business functions, including but not limited to: strategic planning, sales & operations processes. Thanks to open-minded and agile approach, as well as strong analytical skills, I successfully managed the leasing and asset tasks in 110 000 sqm. Specialize in solving problems and creating new opportunities for business partners. Experienced in coworking & flexible office solutions.”

Poland was not the first country to climb into the coworking train. How do you explain it?

There are few reasons to explain this. Boom in coworking in the world was mainly caused by 2008 crisis – afterward companies were afraid of future and long lease obligations, typical for major markets (London, Paris, NY, LA…). In Poland as one of the few countries in EU, the crisis was barely slow down so we have missed that driver.

The coworking boom started in Poland ca. 3 years ago with introducing By Adgar Brain Embassy who was the first modern style coworking spaces directed to freelancers, small and medium companies as well as corporations. Together with two modern BusinessLink locations in Warsaw. This was an answer for two new needs which was born in our market: project working and competition for talent pool.

Now we see that these two reasons are the main drivers to rapid growth of coworking market in Poland.

Nowadays, Warsaw is the city in Europe with the highest level of investment in corporate real estate. Are property owner keener to embrace the coworking model? 

In our opinion (in high level) situation in the commercial real estate market and recent coworking boom is best to compare to entrance Uber in the passenger transport market. After few years, Uber didn’t displace taxi’s, car sharing nor buses (and please remember that Polish market is not regulating Uber). This is a response to people’s needs and how the commute.

Same with coworking – this is supplement / feeling a void in commercial real estate market.

The competition is becoming fiercer in Warsaw, with big international coworking names opening up big spaces. How do the existing players react? 

This is the question we will know the answer only at the end of this year and next year.

WeWork entered market and opened first premises in December 2018. Three months later Regus and Regus Spaces, Solutions.rent, NewWork and Wework itself opened 6 more locations in the city center of Warsaw itself! The paste of Market growth is unparalleled. WeWork as the one with the biggest appetite. It will for sure change the market. To what extend ? It is hard to tell.

Do you see something specific to the Warsaw coworking scene that you have not seen in other European major cities? 

We think that pipeline for new investment compared with the market itself in 2018-2020 shows biggest dynamic and fastest growth (relative to the market).

The biggest players are Regus (the oldest one), WeWork and NewWork who will cope with very strong local players like CitySpace, Business.Link and Brain Embassy. It’s worth to mention that the local players showing the appetite to become market leaders in Warsaw, Poland or even in the whole EU  are backed-up by major real estate developers (Echo, Skanska and Adgar respectively).

It is worth to mention that the local players showing the appetite to become market leaders  in Warsaw, Poland or even in the whole EU, are backed-up by major real estate developers (Echo, Skanska and Adgar respectively).

Are foreign companies located in Warsaw more open to join a coworking space than Polish organisations?

Yes and this is not only for foreign companies. Polish entities are also looking for new spaces.

For both, the main drivers (mentioned earlier) are project based work and the war for talents. The modern coworking spaces with very low entry threshold compared with high quality office spaces are gaining.

How difficult is it to build a community in a booming city such as Warsaw, with so much things moving around?

Community Management will be the name of the game in 2019/2020. Because of the young market and the shortage of experienced community managers, this is what we expect to see developing rapidly. With that fast pace of growth and huge competition, simple “event calendar overload” is not enough. Each provider has its own approach and we see that other players wants to distinguish itself, like i.e. Nest coworking who is inviting parents with kids. 

Community Management will be the name of the game in 2019/2020. With that fast pace of growth and huge competition, simple “event calendar overload” is not enough.

How important is the community, according to you? 

For every coworking who would like to anchor the clients and hold them there are three main unique selling points: location, price vs quality, community. You can discuss which one is the most important. However, at the end of the day, community is the only selling points which you can shape by yourself and distinguish from the competitors, and tie the client. So looking from this perspective this is about to live or to die for every coworking space.

At the end of the day, community is the only selling points which you can shape by yourself and distinguish from the competitors

How about coworking in the other Polish cities?

Poland it is not only Warsaw and we have few very strong and important local cities like Kraków, Wrocław Poznań, Tri-City, Silesia with fiercely competitive Lublin and Białystok in the east of the country and central located Łódź which was in the shadow of Warsaw for a long time and now getting bigger and bigger attention.

Local markets growth is slightly slower than in Warsaw but the rapid growth is ahead of us and they should boom in next 3 years.

Where do you see the coworking market in Warsaw in 2 years and 5 years time?

We do believe that the future of market is ca. 15-20% of modern office stock serving as coworking space. The question is how fast we will reach that goal. Is it 5 years from now? – we will see. For sure, in the next two years, we will see rapid growth and interesting fight between operators. Nevertheless, as the product is still barely known by the market, there should ultimately be plenty of room for everyone.

Eric van den Broek, Sophie Ozdzinski, Stefano Borghi and Augustin Riedinger are co-founders of Copass, a marketplace that offers a selection of workspaces around the globe: vibrant or calm, huge or small, classic or atypical, they got everyone covered.

We have interviewed Eric van den Broek to find out more about trends in nomad coworking as well as in new group working patterns.

Can you introduce Copass, the philosophy behind it and how do you compete in such a “coworking platforms” dense environment?

Of course! Copass is a global coworking membership enabling its users to access a network of more than 950 independent coworking spaces around the globe with one single subscription. Basically, it’s like being a member of a thousand spaces at once.

Copass was born 6 years ago, in early 2013 as the brainchild of former coworking space founders. I’ve been involved in the coworking movement since 2011. In 2014, coworking was growing rapidly and what started as a genuine bottom-up movement started to get structured as a market. Big players started to join the movement with big money and were able to open networks of locations. 

As I naturally became friends with many coworking space managers all over the world, we started discussing the possibility of offering a seamless experience for coworkers to work from any coworking space. The idea was the following: we could offer the value of a network to our members while staying independent at the same time. That’s basically how Copass started!

You were not alone on the market, were you?

In terms of competition, we’ve seen a lot of platforms come and go. Most listing platforms did fail as members would simply bypass the platform and deal directly with the space when they found it. Some competitors do work by focusing on meeting rooms and closed office spaces but that’s a very different audience. Copass stayed true to its roots by focusing on offering a seamless experience for coworkers and coworking space managers.

As we are self funded, we also could deal with a slower growth than what a VC funded company might expect. When we started, coworking was still pretty niche so the idea needed a little time to really make sense. Some say we’ve been patient but I would say we’ve been passionate.

You once said coworking leans towards “team consumption” instead of individual subscription. Can you elaborate? 

I often think back about the old times when we had to explain 10 times a day what coworking actually is back in 2011. Nobody had even heard of it! Now if you walk in a random café and ask the question, most of the people know exactly what it is and what is the benefit of using one. Coworking has become mainstream, and as it became mainstream, it went way passed it’s initial target audience that was mostly made of freelancers.

Teams and companies could now have instant access to cool facilities and ecosystems anywhere they want without the burden of a formal lease. This change also reflects on Copass. Companies can create groups, attribute individual memberships to their teammates or share a pool of daypasses, centralizing all their coworking expenses in one place. The value of a network for this new audience is even greater than for individuals so Copass is an excellent fit for them. I would say that today, around 30% of checkins are done by teams.

Shall coworking spaces focus more on “teams” rather than individual freelancers, then? 

It’s hard to answer this question as I think both approaches can be valid. Coworking Spaces focusing on freelancers can understand and answer their needs better. Community for freelancers is way more important than the actual facility as you’re talking to people who suffer from isolation when working from home. This isn’t so much the case for teams and companies. For them, the services and the facilities play a much bigger role. In a way, working with teams and companies is way more “transactional”.

In terms of community, teams usually don’t blend in as much as individuals as the team is “socially self sufficient”. In the early days of coworking, that was super community focused, this was actually a problem as too many teams in a space could affect the overall vibe of spaces and I remember having discussions with other operators on this very topic.

So I think freelancers and teams are actually two very different things. What happens is that, as coworking grew as a market and as the real estate pressure became stronger on space operators, coworking spaces needed to grow in size and to do so, they had to address different needs. Teams offer a more predictable income and working with teams is more “scalable” than working with freelancers as refining a service and a space design is easier done at scale than maintaining a unique community vibe.

I think freelancers and teams are actually two very different things.

The final answer would be: if you’re going into coworking for business and money, you should go big and find a way to accommodate teams within your space. If you’re going for the love of community, you might be able to go smaller and work only with freelancers. But there is no definite answer here.

From your data, it seems coworking users keep being more urban. Does it mean rural coworking remain an exception?

As much as I’d love to say no, I would have to agree on that. Coworking is still an urban phenomenon and there are many reasons for that:

1. People feel the need for coworking spaces when they lack space at home. When you’ve got a 150sqm house in the countryside with your own office in it,  you don’t feel the urge to get out as much as when you live in a 30swm flat in Paris
2. To make sense from a financial point of view for a coworking space, you need a certain density of potential members around.
3. As you’re going away from big cities, the economy is a lot less about services and a lot more about the industry or agriculture. 99% of coworkers are actually service providers.

That being said, in the long run, I could see a future where people move away from the cities and work remotely. I would actually love that as I think centralization causes many problems, but that’s a topic for another day 🙂 

In the beginning, you were more focused on coworking travelers. Now, it seems Copass users tend more to cast their coworking need locally…

I think the so-called digital nomad lifestyle is for people a bit like sex for teenagers: many talk about it but few actually do it. Don’t get me wrong: I’ve been considered a Digital Nomad myself and I loved it. It’s just that looking at the media, it appears bigger than it actually is because it’s sexy and tickles people’s curiosity, especially when you’re stuck in a crappy office doing a job you don’t like and daydream everyday about quitting your job to go around the world 🙂 

It’s true that Copass has been perceived a lot like a tool for nomads and I think we suffered from it as many people would think “this product is so cool but it’s not for me as as I don’t travel that much”. At the end, most of our users actually roam within the same city and sometime travel with Copass! For urbans, coworking is the new normal and as they have many options around, it makes a lot of sense for them to not commit to one but to use different spaces based on their needs. If you’ve got a meeting with a client at the other end of the city, it doesn’t make sense to go all the way back to your homespace.

The office, which was a constraint before, has become a tool and you can now use the best tool based on your needs and constraints.

Do you see big differences between countries in the way people interact with coworking? 

I think in the end, what is the most striking are the similarities between spaces rather than the differences. From a sociological perspective, it’s very interesting to see that there is way more in common between a freelancer in a coworking space in New York City and in Indonesia than between this same freelancer and a farmer in minnesota. There is a global culture that emerged beyond countries which is a pretty unique phenomenon. You’ll still see some differences though but not that much.

How do you see the main coworking usage patterns and profiles evolve in the coming 2-5 years?

I see coworking as becoming a feature of almost anything. A lot of big real estate players already include coworking in their projects alongside restaurants and accommodation. Coworking has found a place in the real estate industry.

I’ve got mixed feelings about it and I know a lot of coworking pioneers also do. We came in this space and shaped the movement for the community and the values and not for selling square meters. The real estate part of it was only something we had to deal with. Let’s not fool ourselves: the intentions behind a WeWork or Spaces and an indy space are not the same…

That being said, there is no need to get too mad about it. That is the way things go and in a way, we all knew that was going to happen. Also, keep in mind that those big players address a different market I believe. For them, business comes down to flexibilizing the workspace, which is something companies need and have needed for a long time. When you’re creating a business, it all comes down to the problem you are solving. While pioneers in coworking solved the problem of isolation by creating communities, real estate players solve the problem of flexibility by offering office as a service.

Those two things are going to grow together, the latter being mechanically much bigger in size than the former.