doing business in Russia: co-working centers and practices

Co-working centers are growing in Moscow. Many companies have embarked on thrift. Renting workplaces in coworking is cheaper than in conventional business centers.

Office for an hour

Coworking was started by an American programmer Brad Newberg in 2005. The first unusual offices appeared in United States, where for a nominal fee for two or three hours the places offered everything needed for work: a table, a chair, a telephone, Internet connection, office equipment and inexpensive meals. If necessary, it was possible to rent a room for business negotiations, luggage storage, a gym and even a shower room.

Novice entrepreneurs met the initiative of Newberg with a bang. Nobody was confused by the main drawback: open office space would have to be shared with other tenants. The new democratic format quickly gained recognition around the world.

In Russia, the first co-working center opened in 2008 in Chelyabinsk. Today there are more than 300 of them in our country. The widest choice, of course, in Moscow with 178 coworking locations.

According to experts, the fashion for unusual offices in Russia was stimulated by the crisis that began after the introduction of Western sanctions. Over the past three years, the volume of co-working offers has increased about three times: by the end of 2018, it will be 141 thousand square meters (at the end of 2015 it was only about 43 thousand square meters.), which will accommodate approximately 31 thousand people. The volume of input co-working in the capital for three years is comparable to the volume of input of class A and B office space for 2018 (about 200 thousand square meters).

Two facts speak about the good prospects of this segment of the office market: not only the number of objects, but also the number of large networks is growing. Major international players are entering the capital market: Rent24, Best Coworking Spaces, WeWork. Investors are well aware that traditional offices are now in abundance and Moscow market needs new formats for development.

Who uses co-working?

Experts believe that coworking is ideal for start-ups and project teams that do not require permanent placement of employees. The workplace can be rented for an hour, day, month or a whole year. With a long-term lease, a separate place is assigned to the client. Often, tenant neighbors exchange orders or create joint projects. Freelance co-workers and business travelers from the regions are also eager to attend.

Two key formats are most in demand: separate furnished offices with all business infrastructure and services, as well as rental of working places in coworking. Highly specialized, niche sites appear on the capital market, which also find their consumers – for example, small-scale manufacturing, sewing, and architectural bureaus.

In addition, the trend to combine co-working and a mini-hotel or hostel is gaining popularity.

Another interesting trend is the transition of small and medium-sized businesses from co-working to separate office premises. As the business grows, the team needs a separate workspace, and the benefits of coworking at this point are already turning into difficulties.

Large-scale business has also paid attention to the trendy format – for example, the country’s largest state bank. The composition of tenants of flexible office spaces is changing: today we see an active interest in them from large companies and corporations that place temporary working groups and project divisions in co-working arrangements.

In Moscow, an already noticeable global trend of sharing mini-offices with the included service (smart offices) is gaining a momentum. In a smart office, a resident, in addition to beautiful design, common areas with designer furniture, which are also available in classic coworking, receives personal space for their team. This office architecture allows teams to preserve the corporate culture of their company, while receiving significant bonuses from sharing kitchens, living rooms, reception and complex IT infrastructure – the heart of the office. This is an extremely relevant format for small teams, headquarters of international companies and design departments of large corporations. Smart offices are a new product for the capital market, and customers are still “getting used” to prices. They range from 20 to 60 thousand rubles per workplace per month with VAT.

The average cost of renting a workplace in Moscow coworking ranges from 6 to 25 thousand rubles per month for a fixed workplace and from 4.8 to 20 thousand rubles per month for an optional one. The average size of an individual workplace in Moscow co-working is 7 square meters.

The coworking market in Moscow has a great potential for development; by 2020 the total area of flexible working spaces in the capital will more than double. Now the supply of such workspaces is 140 thousand square meters which is about 1% of the total supply of office space in the Russian capital. By 2020, the proportion of co-working will increase to 2%. The size of the coworking market in Moscow is about 25 billion rubles, or 8.6 million square meters.


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