New Shared Office Space Opens

First offering

Venture Workspace’s first offering, which opened in 2016, is in Claremont. Next month it will open its second offering in Constantia. Fourie said his business model is focused on providing space to small business owners and service providers.

“Venture Workspace Constantia will play an important role in decentralising co-working in Cape Town, where traffic congestion is already a major issue. Capetonians are now losing 162 hours a year, or five whole days, to traffic, which is madness,” Fourie said.

Venture Workspace’s offices do not offer the same array of facilities that international group WeWork and SA group Workshop 17 do, enabling it to charge less than those other providers do.

Instead of having on-site kitchens and restaurants, the offices are in or next to retail centres. Venture Workspace’s latest share space will be located in the Constantia Emporium shopping centre.

“We are seeing that co-working in the suburbs, and specifically in retail spaces where you have one-stop access to shops, food, banking, and lifestyle services, is already successful in the US,” Fourie said.

Helps retailers

The shared office spaces also help nearby retailers, he said.

“So you have tenants using the retailers, but those tenants also have meetings at the work-spaces, which brings more business for the retailers. The work-spaces create hubs. A vibrant coworking business hub is a major asset to a retail property and can help to shape an ideal, sustainable tenant mix,” he said.

In a prime location, Constantia Emporium is close to the M3 at the Ladies Mile intersection.

WeWork and Workshop 17, which are located in business nodes in Johannesburg and Cape Town such as Sandton, Rosebank, and the Cape Town CBD, have tended to attract multinationals as tenants as opposed to entrepreneurs.

WeWork is the main tenant of Redefine Properties’ The Link building in Rosebank.

Caters to a multitude of industries

Redefine CEO Andrew Konig said that WeWork has rented space to the likes of technology company Naspers.

“We have seen quite a few large, established companies take space in WeWork in Rosebank. You find them using the space for secondary operations,” Konig said.

Old Mutual has outsourced projects that are run out of Workshop 17 in 2019.

WeWork, the co-working-space company, was valued at $47bn (R691bn) in January, when it announced it would pursue a listing earlier in 2019. That listing was scrapped in September. In July, WeWork reported it was losing $219,000 hourly. In 2018, the company’s losses and revenues both doubled, to $1.9bn and $1.8bn, respectively. As for October, Japanese investment firm SoftBank took control of We Work in a deal worth $8bn.

An upward growth trajectory

Fourie said Venture Workspace has become profitable “relatively quickly”. Workspace Claremont is at 90% occupancy. Workspace Constantia is at 50% occupancy before its opening on December 1.

In the first year of trade, Venture Workspace’s turnover grew 275%. This was followed by 5% growth in the second year. And a whopping 36% in the third year, 2018, projecting a growth of 53% in 2019.

“In general, the margins in the co-working space can still be quite low. We have been fortunate with our business model to generate continued growth and, in turn, profit,” he said.

A shared office space designed for all

Head of listed property funds at Stanlib, Keillen Ndlovu, said
co-working and flexible office workspace is the fastest-
growing segment globally in the office market.

“It’s taking people and small businesses away from working from home or in coffee shops. Even the creative and innovation teams of big corporates are moving to this space,” he said.

“It enables companies to grow quickly when they need to and to scale down quickly too when market conditions change without being tied to long leases. It also turns out to be cheaper than traditional office space.”

(Source: taken from BusinessDay on 18 November 2019)