These mastodontic retail spaces seek to reinvent themselves by attracting a new type of audience. Everyone wins, professionals can work and have everything they need at hand, while managers gain traffic.
What if that were the salvation of a business that, according to the most alarmist voices, comes close to its own Armageddon? Shopping malls are becoming depopulated. People don’t buy as much in physical stores anymore. But who said that these mastodon buildings should serve only for consumption? From this idea is born the hope of the sector, as was seen this week at the RECon conference, held in Las Vegas (USA). Because now shopping centers also want to be health centers, coworking offices or hotels.
“The current closure of establishments allows us to be creative with space”, starts the vice-president of Vestar, Taylor Alvey. “This includes reconverting a section of the mall to attract a new type of user. An ambiguous statement that exemplifies a real case. At The Gateway Center in Salt Lake City, USA, Vestar has transformed a sporting goods store into the headquarters of Recursion Pharmaceuticals and its 400 employees.
This is not the only case. More and more coworkers are choosing to settle in shopping malls. A trend that, according to Industrious president and confederator Justin Stewart, has several explanations. The first is that the space in these retail giants tends to fill up much faster (20 days on average compared to 90 days in traditional offices).
The second great attraction is that employees have all the possible comforts at hand (shops, restaurants, pharmacies, supermarkets and even nurseries).
There are those who go even further. It is the case of the coworking company Spacious that to make better use of space and get more affordable prices has reached agreements with restaurants in shopping centers that do not open until 5 pm. Thus, they rent these places to professionals so that they can work quietly at the tables that will later serve the diners. A service that completes with the reservation of night rooms for those who want to take advantage of more hours of the day.
Even the coworking giant WeWork has entered this game. The New York-based company has offices in 280 locations in 86 cities in 32 countries. More than 100,000 people work there. And now, some also work in shopping malls. The difference with others is that it not only offers space here, but also uses it to create its own food and merchandising stores.
Another great trend that has settled in RECon is the hybridization of shopping centers with health centers. According to a JLL study presented at this event, nearly 2,800 medical clinics are located in retail spaces in the United States. And here come all kinds of businesses related to wellness, from dentists to beauty clinics or yoga centers.
The evolution and future of coworking in Bangalore
The term coworking refers to collaborative workspaces. They are offices where different people, usually entrepreneurs or small businesses, work together. In this way, professionals from different sectors coexist in the same space.
The outbreak of the economic crisis in 2008 led to a boom in coworking spaces. Companies in Bangalore were looking to cut costs, while unemployment was on the rise. This model triumphed as an environment for those who decided to undertake in the face of the economic situation.
In this context, both teleworkers and the self-employed looked for cheap, equipped offices. And they found a working environment in which to interact and share experiences with other professionals.
More investments and hiring
Investments in this type of space have skyrocketed in Bangalore in recent years. In fact, the Coworking firm The Venture Studios believes that by 2030 they will account for 30% of the office market in India. In addition, the main coworking companies are already contemplating investments of more than 70 million in the coming years.
Between 2013 and 2017 increased by 246% the number of square meters contracted for these spaces in Bangalore and Hyderabad, according to consultant JLL. In addition, the hiring of coworking spaces tripled in 2018 in both cities with respect to the previous year, according to The Venture Studios.
The reasons for success
In 2018, more than 2.3 million people turned to such offices around the world. In HSR Layout there are already more than 100 flexible offices, according to the directory of Coworking India.
Experts attribute the success of co-working to different reasons. On the one hand, cost savings for employers and entrepreneurs. Many companies and freelancers saw coworking as a way to avoid the expense of renting and fitting out a traditional office. On the other hand, to the synergies that it generates and to the atmosphere of collaboration and creativity that it achieves.
According to JLL in its report Disruption or Distraction, the success of co-work is due to “its design, its equipment and its culture”, which achieve “an improvement in collaboration, openness, exchange of knowledge, innovation and user experience”.
The advantages of flexible offices
The main virtues of this type of workspace, in addition to savings, have to do with flexibility and a sense of community. On the one hand, they allow workers to choose their own timetables and which services are best suited to their activity. This flexibility becomes a strong argument when it comes to attracting talent.
On the other hand, the professional relationships created by contact in the workplace translate into greater creativity. It also eliminates the isolation that telework often causes.
The fastest growing cities
The two main centres in Bangalore are HSR Layout and Koramangala. Both cities, according to The Venture Studios, added more than 90,000 square meters of flexible offices in 2018. Of the more than 900 coworking spaces in Bangalore, 50% are in HSR Layout and Koramangala.
However, the growing trend of these spaces is already established in other cities in the country, such as Chennai, Delhi, Mumbai, Kolkata or Pune.
The future of flexible offices
The growth forecasts that were predicted a few years ago are still in place today. The consulting firm JLL predicted already in 2015 that by 2030 flexible spaces could reach 30% of some corporate real estate portfolios. In their latest report, from 2018, they maintain that this figure will be real.
Although it was the self-employed and startups who launched the concept of coworking, experts in the sector believe that large companies will be the driving force in the coming years, in the context of Smart Cities.