Tag: office market

Based in Stockholm, Skanska Commercial Development Europe counts among the biggest Real Estate Development company in Europe. Skanska owns Business Link, a fast growing coworking brand in Central and Eastern Europe (CEE), currently operating 5 locations, in Poland and in the Czech Republic. We have interviewed Jaroslaw Bator, Managing Director at Business Link & Business Development Director.  Jaroslaw will be a speaker at the upcoming Coworking Europe 2019 conference, to take place in Warsaw, on November 13-15.

Hi Jaroslaw. Can you introduce Business Link to us?

The Business Link brand was created in 2011, based on the Academic Entrepreneurship Incubator Foundation – an NGO supporting Polish entrepreneurship. The growing scale of the project sparked Skanska’s interest, which in 2017 together with the Foundation as a joint venture, developed the concept much more boldly and directed it to professionals, who expect the best locations, a chique design and perfect customer service. Currently, Business Link is a brand wholly owned by Skanska, an unparalleled model of cooperation between a key developer and an operator of flexible work spaces.

You have plans to open up a total of 50.000 sqm of coworking space in Central Europe. Is the region ready to absorb such an increase?

The attractiveness of the CEE region has already attracted many players in the flexible work space sector. We are slowly beginning to observe market segmentation. We found our niche within – remarkably designed and operated spaces. Therefore, at present, our priority is to further professionalize our current locations, rather than aggressive expansion. Nevertheless, we’re carefully monitoring other CEE markets, noticing in them potential for further growth, fuelled primarily by the professionalization of personnel and increasingly frequent decisions to base business operations in these countries.

We are slowly beginning to observe market segmentation. We found our niche.

Why did a major regional Real Estate operator like Skanska jump into the coworking business directly?

Every enterprise expecting dynamic growth on the market needs an ambitious strategy and to adopt emerging trends to achieve business success in a changing world. Investment in a new, rapidly growing real estate segment seems to be the natural step forward. Additionally, flexible spaces complement Skanska’s portfolio. This is not about creating a façade about a wide range of services – Business Link truly responds to the needs of other Skanska customers who, for example, underestimated the number of workplaces required or need to diversify their job portfolio, guaranteeing their employees the ability to choose a place at any time outside of the main office.

This is not about creating a façade – Business Link truly responds to the needs of other Skanska customers who, for example, underestimated the number of workplaces required.

Why did it make sense to Skanska to take full ownership, and not keep it as a joint-venture?

Synergy is the key word here – Skanska decided to take full advantage of cooperation with Business Link to more effectively combine a traditional developer’s space leasing operations with the offer of flex space. It is worth noting here that this situation is not frequently encountered – flex spaces are most often managed by relatively young entities without a well-established organizational culture, which is why we believe that Business Link can gain a lot by observing processes and models.

Flex spaces are most often managed by relatively young entities without a well-established organizational culture, which is why we believe that Business Link can gain a lot by observing processes and models.

Isn’t the move cannibalizing the traditional office long term lease market you are in too?

Skanska offers excellent space for the entire company in a traditional lease formula. As Business Link, we supplement this portfolio by providing a more flexible product that can be used as the main office – a solution chosen by small companies, as well as larger teams exceeding a hundred people. An office such as this facilitates communication and enables efficient work coordination, whilst guaranteeing excellent conditions for all employees. We can also offer our clients a design office – used only for a specific time or an office dedicated to remote work outside the company’s main office. Diversification of office space within one organization is one of the most important office trends. Users of such a model are companies wishing to offer more flexibility than the one resulting from the possibility of remote work, e.g. from a home or a cafe.

Diversification of office space within one organization is one of the most important office trends.

What is “coworking 2.0” (name coined in some of your communication material)? Some other players would call themselves business center or serviced office…

Coworking today – in business terms – is an outdated model. Quite a bold statement, but reflected in the space designs of many players in this market. Please note that we can rarely find only open-space spaces or spaces only split up into private offices. Flex space is a model that combines these two formats. It is therefore a balancing act to allocate types of workplaces within the operator’s space – on one hand, in each location, responding to local demand, and on the other hand – ensuring financial viability of the location. It is difficult to build a community without having a penny.

Coworking today – in business terms – is an outdated model. Quite a bold statement, but reflected in the space designs of many players in this market.

You now speak a lot about ecosystem, engagement, green surroundings… Are hospitality and service more important than technology and facility, nowadays?

Business Link today, above all, we think, has the largest customer service team on the market, providing comprehensive support and service at the highest level. Our offices are located in buildings that meet the highest environmental standards, and the design and equipment offered to customers allows for the enjoyment of green surroundings – from the walls, covered with reindeer lichen, affecting the humidity of the air, to green terraces, guaranteeing rest among greenery in the heart of the city . We don’t try to be the driving force behind our clients’ free time at all costs – we focus on quality, not quantity. We will sooner choose a live film music concert, rather than a mentoring/educational event so popular on this market. We strive to give tools that will allow our clients to organize the work and leisure of their employees at their own discretion.

We strive to give tools that will allow our clients to organize the work and leisure of their employees at their own discretion.

The real estate world is full of the WeWork name. How do you position yourself as opposed to that kind of  big international player? 

Business Link offers customers splendidly designed prestigious spaces with an impeccably prepared customer service team, the most numerous on the market. The key to our market success is an individual approach, investing in the professionalism of the team, and responding effectively to the needs of small and large companies. The Business Link strategy is based on building strong business foundations on local markets in Central and Eastern Europe (currently 4 locations in Poland, and 1 in the Czech Republic). We prefer to measure our success with customer satisfaction rather than with geographical coverage. This specific specialization allows us to cater to the needs of the market that we know perfectly well.

We prefer to measure our success with customer satisfaction rather than with geographical coverage.

What are the differences you see between Poland, the Czech Republic and the situation of coworking in Western Europe?

In the real estate segment, including office space, the markets of Central and Eastern Europe are still emerging markets. The stability of these markets, proven during the recent financial crisis, makes them a natural place for investment, guaranteeing high rates of return. The Western European market is more saturated, and some natural market processes – such as the fulfillment of regional demand – having inevitably appeared there before. In the Central and Eastern European markets, in the segment of flexible offices, Business Link is a precursor of the network approach, allowing for the creation of business synergies amongst the large regional cities. At the same time, we’re observing how increasing supply causes gradual segmentation of the market, allowing to meet the needs of various types of customers.

Are your plans limited to Central Europe or do you look beyond?

Our roots and specialization lie in the CEE region, which is why we would rather stay in our comfort zone.

Copernico is one of the biggest coworking players in Italy. We have interviewed Luca Pasqualotto, Vice-President and Development & Asset Management of Copernico, to find out more about the italian coworking market and Copernico’s mission, vision and future plans.

Hi Luca. What can you tell us about Copernico story and positioning?

Copernico was incorporated in 2016 as the spin-off of the flexible-offices activities previously managed by Halldis, one of the main service apartments operators in Europe. Copernico is currently the main coworking and flexible office operator in Italy, managing 13 buildings, about 72,000 square meters, 8,000 members and growing with new openings in 2019 and 2020 in many Italian cities. It’s positioned as a platform that helps SMEs, large corporations and freelances to work, meet and boost their activity in a physical and social environment appositely designed and managed for their needs.

 

You once said: “It’s  important to build up a strong footprint in your home country before moving abroad”. Why? 

We believe that links with the local ecosystem are key to really get in touch with companies and people, then scaling to different cultural, social and business environments. Our goal is to become the point of reference for companies and professionals in Italy first and expand to other countries after that. We believe that links with the local ecosystem are key to really get in touch with companies and people, then scaling to different cultural, social and business environments.

Are there any elements in your offering that makes it specifically «Italian»?

Most of our suppliers (furniture, food & beverage), for instance, are Italian, as well as our employees, but what makes us more effective in the local (currently Italian market) is our custom approach to the needs of our customers in order to understand their needs and create tailor solutions that make them feel at home. Doing so, we are capable to attract and retain our customers for long-term stays that can even be considered often partnerships.

Most of our suppliers (furniture, food & beverage), for instance, are Italian.

 

What drives the demand for coworking in Italy, nowadays, would you say?

Coworking and flexible offices solutions are more and more asked from all companies and professionals, since they need all-inclusive workspace solutions that help them to focus on their own core business, be flexible, know exactly how much they spend, and benefit from unique business and social networking and boosting opportunities, that are not possible in traditional offices.

Looking from abroad, Italy seems to have been a bit shier than other European countries in terms of coworking penetration. Is it a wrong impression? 

In Italy there are currently only 2 players that are as relevant as Copernico, with a 3rd one soon opening, while all the others are very small, local and independent operators with few resources and ambitions. In my opinion that is mainly due to a lower degree of maturity of the Italian real estate industry in comparison with other markets in Europe. Also, the Italian real estate market is very fragmented both in geography and in value terms, with many 2nd tier cities (only Milan and Rome are relevant from an international perspective) and many independent landlords.

The Italian real estate market is very fragmented both in geography and in value terms, with many 2nd tier cities (only Milan and Rome are relevant from an international perspective) and many independent landlords.

What are Copernico’s plans and ambition for the coming 3-4 years?

As said, we are consolidating our presence and strength in Italy, then we want to expand to other European countries.

In 2019 Nextdoor became Wojo, accelerating its development and creating the ambition to become the leading European coworking network. Two years before, Accor Group, one of the biggest international hotel companies on the planet (operating brands such as Ibis, Mercure, Sofitel, etc.) had taken a 50% share in Nextdoor, by then 100% owned by the real estate company Bouygues Immobilier. We have interviewed Stéphane Bensimon, CEO of Wojo, in order to find out more about the project Wojo and its present and future plans in Europe. Wojo’s CEO will be a speaker at the upcoming Coworking Europe conference taking take place in Warsaw on November 13-15, 2019.

Hello Yoann. A few years ago Accor Group joined Bouygues in the Nextdoor network to develop coworking offerings. Why was this move needed for both players at the time?

A 50/50 joint venture was signed in July 2017. Insofar as Accor hotels were already endowed with shared spaces conducive to meetings and interaction, the idea of offering a place to work (as well as to network) dedicated to clients and local entrepreneurs came to mind naturally. Bouygues Immobilier aims at offering its clients an opportunity to plan shared workspaces (bars, coworking spaces, lounge areas, meeting rooms, carparks) from its design stage and hence help them optimize their business costs. So the fit between both companies was clear.

Nextdoor has become Wojo. Why was a change of brand needed? Is Accor more in the driving seat now?

Nextdoor became Wojo to help its international roll out. Wojo is a spirit – the combination of Work and Mojo. Once Accor took shares in the company’s capital we truly worked hand in hand with Accor’s Innovation Lab’ to define together the future of coworking; true teamwork followed. When the idea of a typology of spaces (“Spots” and “Corners” linked to Nextdoor sites) came about, it seemed clear that we had to reinvent ourselves in order to fulfill  peoples new ambition of working internationally, of working at most ten minutes from where one is living, etc. And no, Accor is not specifically the one in charge. We designed Wojo together and since then we have been standing on our own two feet with its support.

You want to become one of the biggest coworking providers in Europe by 2022. Why are hotel professionals well positioned to serve the flexible workplace industry would you say?

This is because the Accor staff is unrivalled in terms of reception and hospitality and we feel those to be key elements. A friendly dimension is at the core of Wojo’s offering. We welcome our new members through a shared moment, making sure that their days go by perfectly well. Accor has already got hotels ready to welcome clients all over Europe. This makes things easier for us in terms of networking. In the long run, we would like everyone to find a place to work less than 10 minutes from where he/she is located (whether a nomad or sedentary worker).

Workers are forever expecting more services (catering, fitness rooms, concierge services) at their workplace with which hotels are already endowed. According to an Inkidata study conducted in February 2019 for Wojo (results of the study, in french), 48% of French workers would like to benefit from spaces linked to sport or relaxation at the workplace. This is because it is the best way to offer business travellers an opportunity to make up a local network by offering a service that facilitates networking.

48% of French workers would like to benefit from spaces linked to sport or relaxation at the workplace.

Will Wojo’s expansion occur only through the Accor Group properties and hotels network or could we see Wojo spaces in third-party buildings?

By the year 2022 we expect to open 1.200 locations all over France and Europe within Accor hotels. Yet, Wojo Spots and Wojo Corners have been designed to be set up in any third-party location so long as it fulfils a certain number of requirements (high-quality and safe Wi-Fi, furniture quality, acoustics, good working conditions, etc.). In the long run they will be made available in train stations, airports, shopping centres, cafés, etc.

Today, for example, there is a Wojo Spot in LA.SALLE.DE.SPORT with a Reebok concept store and a social club in the very heart of Paris. Not to miss out on anything, the locations that are already open can be viewed on our web app.

Nowadays hotel chains are entering the coworking field in bigger numbers. What does it tell us about the changes in the hotel business on the one hand and the evolving coworking market on the other hand?

Demand, which is directly linked to the revolution coming about in working conditions, is huge and the offerings are equally so. However, quantity does not rhyme with quality. It may appear to be easy to open up a coworking space. Yet in reality one must be in a position to offer a true experience including reception, a secure wi-fi connection, a quiet location, networking possibilities, the right atmosphere, services, etc. Small things (in reality not that small) make the difference. As for hotels: they have been disrupted by Airbnb. They are now in search of something new. By definition, a hotel is equipped as a minimum with a lobby, breakfast room, etc. in which it is tempting to improvise a coworking experience. In the long run we can imagine a client choosing a hotel no longer by pictures of the room or by how clean the spa is, but by the quality of its coworking facility.

As for hotels, they have been disrupted by Airbnb. They are now in search of something new. By definition, a hotel is equipped with a lobby, breakfast room, etc. in which it is tempting to improvise a coworking experience.

Seen from the outside, Nextdoor has positioned itself more in the corporate segment of demand for coworking with spaces located in higher-end business districts. Will Wojo keep positioning itself in that slice of the market?

We understand your interpretation, as Wojos origin comes from an intrapreneurial project on the part of Bouygues Immobilier. The first buildings meeting the conditions for such projects were naturally found in Greater Paris. Yet, from the outset, Nextdoor has had a true willingness to bring together companies of different sizes at one location to encourage open innovation. As a result of its positioning and more concretely speaking its price policy, its community has always been comprised of a host of different profiles. Wojo follows along these lines with its Wojo Spot offer of 9,90 Euros per month with no commitment. We are open to students as well as key accounts. Remote work now concerns all of us and we have at heart to see different sectors of activity, ages, trades come together, truly valuable.

Remote work now concerns all of us, and we have at heart to see different sectors of activity, ages, trades come together, truly valuable.

Wojo Spots, Wojo Corners… Is the Wojo offering targeting only nomad workers or longer-term resident workers? How different will Wojos be in Ibis or Mercure from Wojos in Sofitel for instance? What is your approach to segmentation?

There must be no ambiguousness here. Wojos are open to all those who wish to work. It is neither a service reserved for hotel clients nor a service delivered exceptionally to nomad workers. Our aim is to enable travellers and/or nomad workers to meet “locals” and be given an opportunity to network. We are therefore addressing the district’s inhabitants or professionals who are invited to come there to work, near to where they are situated! Nearly all brands are eligible, except for ultra-economical ranges such as Ibis Budget or Hotel F1 or ultra-luxurious ones (such as Orient Express Raffles). The criteria imposed, such as a secure wi-fi connection, reception, reduction on beverages and snacks… are the same for everyone. At this stage we have begun to roll out Spots in France in an economy/mid-range: Ibis Styles, Ibis, Mercure, Novotel, etc. and some are about to open in the high-end/luxury range within Pullman, MGallery and Sofitel. As for Corners, this concerns the same range of brands as Spots.

Hospitality is the number one value proposition offered by hotels. How comfortable are you with the notion of community  as an important factor in the coworking experience?

As mentioned above, one of our strengths lies in the conviviality and good atmosphere that reigns in all Wojos. Furthermore, Wojo does not exist without its community! In addition to shared office spaces Wojo stands on a team of passionate people.

We thus offer a wide range of business and festive activities in each space throughout the month so as to enable each person to meet others, exchange and learn as well as relax. Community Days for example are held every week in a different space. They enable members to pitch their propositions,  propose a workshop, meet our partners invited for the occasion, invite their clients, attend a conference, etc. Our community also interacts on our digital platform. Discussion and support groups are set up where a program of physical activities is available.

Some experts predict that coworking will represent 20 to 30% of the whole office market by the end of the coming decade. Would you agree with that prediction?

Yes, I believe that is correct. It is more than just a trend. It answers to a need on the part of employees and companies alike, even if for different reasons. Of course we would like to keep up the pace. We plan to open 50 Wojo buildings, 100 Corners and 1 000+ Spots in France and Europe so that members never have to worry about where to set up to work again, hence giving them a guarantee to stay forever connected with their community via our digital platform.

What are Europe’s specific challenges in the field of workplace expectations as opposed to other parts of the world?

There is no specific challenge in Europe compared to other continents. New ways of working are growing everywhere. For example, we see the same trend in Asia with coworking representing more than 3% of office stock in Hong Kong or Singapore. I’m personally convinced that Africa could be a strong coworking market in the coming years. We decided to start Wojo within Europe because of our field knowledge and needs expressed by our current members.