Changing work styles fueling demand for coworking spaces

By Beatriz Marie D. Cruz, Reporter

DEMAND for coworking workspaces in the Philippines is expected to rise amid easing inflation and as companies shift to flexible, short-term leasing, analysts said.

“The recent drop in inflation to 1.4%, coupled with the Bangko Sentral ng Pilipinas’ (BSP) guidance toward gradual interest rate cuts signals improving macroeconomic conditions, setting the tone for renewed business confidence and investment activity,” Ruth Coyoca, assistant vice-president for sales and business development at Greatwork Global Workspaces, said in a Viber message.

“For the coworking industry, this shift presents a significant upside,” she added.

The coronavirus pandemic has accelerated companies’ shift to flexible workspaces amid changing work styles. These include coworking spaces, hot desk and virtual offices and hybrid workspaces.

Ms. Coyoca said further rate cuts by the Philippine central bank could encourage both big and small companies to take up more flexible workspaces.

“Lower interest rates enhance liquidity and reduce the cost of financing, encouraging startups, small and medium enterprises and large corporations alike to explore expansion strategies, including new project teams and satellite offices,” she pointed out.

Inflation slowed to 1.4% in April, the lowest in over five years. BSP Governor Eli M. Remolona, Jr. earlier said they are open to cutting interest rates by 75 basis points more this year amid cooling prices.

To maximize the demand for coworking spaces, GreatWork is looking to strengthen its presence in central business districts such as Makati and Bonifacio Global City in Taguig.

It is also planning to expand in regional markets like Cebu, Davao and the greater Manila area amid the decentralization of the Philippine capital, Ms. Coyoca said.

“Our flexible lease terms, cost-efficient setups and prime locations allow companies to scale operations without the long-term financial commitments typical of traditional office spaces,” she said.

“Many international firms, especially those exploring soft market entries or setting up satellite teams, are turning to coworking solutions as a low-risk, high-agility option,” she added.

Weremote, a flexible workspace provider, said it has received inquiries from startups, business process outsourcing companies and corporate teams in need of satellite offices or swing spaces — temporary workspaces used by companies during periods of transition such as renovations, expansions or relocations.

“Flexible workspaces are no longer just a pandemic trend; they’ve become a reflection of how businesses now think about office use,” Weremote Managing Director Rene D. Cuartero said in a LinkedIn message.

He said companies want the flexibility to grow, scale down or adjust their team size without committing to long-term leases.

“Larger companies are coming to us to avoid the capital expenditures of fit-outs and office expansions as they want ‘move-in ready’ private offices,” he said. “On the other hand, smaller teams are choosing affordable but professional coworking spaces that give them credibility without the overhead.”

Mr. Cuartero also cited global economic headwinds from trade wars and geopolitical tensions, which have pushed companies to be more “risk-adverse” in terms of office space.

Traditional, long-term leases often come with heavy upfront costs such as fit-outs, deposits and long lock-ins, he pointed out.

For instance, outfitting a bare-shell workspace can cost over P50,000 per square meter, which may be too costly for some companies, Ms. Coyoca said.

“As these global economic changes continue, we see more companies choosing flexible setups like Weremote because they offer control, scalability and less exposure to risk,” Mr. Cuartero said.

Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said the appetite for coworking spaces remains strong as more companies adopt the “work-near-home” trend.

“A lot… are choosing coworking facilities within condominiums or any co-working facility near their place of residence,” he added.