Today’s workspaces are continuously adapting to the shifting global work landscape. Coworking spaces for rent have multiplied by 200% from 2013-2018, and real estate experts have estimated that more than 3.8 million people will be operating from coworking spaces worldwide by 2020. Despite this consistent trend, traditional offices remain a practical choice for numerous multinationals, although they are not as “traditional” anymore.
Private offices for rent are still offered by various flexible workspace locators. Because of the changes that these flexi space providers implemented, what was once known as the obsolete workspace layout is now gaining relevance again despite the presence of the coworking space layout.
Private Office Global Market Performance
The 2018 Global Coworking Survey tracked the growth of private offices within coworking spaces, which were growing at a stable rate. Today, the share of private rooms inside coworking areas is at 25%, and every tenth coworking space is now comprised of 60% or more private rooms.
The private office market is performing so well that revenue is growing faster than the actual supply of office space. Private offices currently generate more than a quarter of the total revenue (27%,+9pp). In fact, their revenue has increased quicker than their actual space takeup. In comparison, desk rentals have dropped (32%, -4pp.)
Private rooms inside serviced office areas are also cheaper in the long-term, since serviced office providers have management and IT staff on hand to handle anything related to the office, in contrast to renting out a regular office where management costs are shouldered by the company. Additionally, private spaces in serviced offices allow companies to save via operating expense, whereas a normal office with no hardware and furniture requires companies to have larger capital.
The resurgence of private offices came as a result of better layouts, but also because of other factors that made it popular in the first place.
Improved Office Layout
Before modern design reinvented the traditional office, these workspaces often had little variety. A workspace design study by Jungsoo Kim and Richard Dear found that walls and cubicles made employees feel claustrophobic, while traditional office interiors had dull colors.
Now, more office space providers, flexi-space locators specifically, are incorporating highly ergonomic and colorful design elements. Within flexible office spaces, enclosed work areas meshed seamlessly with the coworking space, allowing employees to access the shared area simply by exiting the private room. Units boast visuals that are easy on the eyes, and cubicle layouts within the private office allowed better mobility within the space as well.
Enclosed offices arguably promote better operational control than open areas such as hot desks. The aforementioned study stated that open offices with little to no partitions contributed to higher levels of noise in the workplace, slowing down employee output. There is also limited space for personal phone calls or video meetings in shared spaces.
Employees working from private offices usually do not encounter these problems, as it is easier to manage employees in a confined space compared to open areas. Private offices inside of flexi-spaces also have the benefit of having conference rooms or manager’s cabins, making one-on-one calls and meetings easy to arrange.
One of the best reasons to own an exclusive office is to bolster brand identity. A private office in an upscale location not only gives companies a strategic position, it can also increase a company’s credibility. Moreover, an exclusive office allows companies to keep confidential matters among its employees and executives, as opposed to coworking spaces where there’s less privacy.
The strong performance of private offices worldwide have proven that the traditional enclosed workspace is still a practical investment. Overall, it is a matter of company size and choice. Smaller companies require incubation and coworking stations are ideal for that, while multinationals and growing local corporates will find private offices perfect for operations.
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