El Economista interviewed some Coliving and Coworking keyplayers, Urban Campus being one of them, to analyze how Covid and Social Distancing have impacted the sector.
You can read the full article, Coworking and Coliving Transformed In Times of Social Distancing, here in Spanish, or keep reading for the translated English version.
In recent years the real estate sector has adapted to new ways of living and working with concepts such as coliving and coworking. The pandemic & it’s subsequent sanitary restrictions have led these businesses to develop health & safety protocols and adapt disinfection and cleaning measures to provide safe spaces. Different agents in the sector agree that flexibility with users and the importance of the community have been the key criteria in the new models they have put in place. Begging the question, what is a shared space in the age of social distancing?
In the case of coliving, at the toughest point of the pandemic, “occupancy percentages fell and rents were renegotiated, both with tenants and between building managers and owners. However there have been no major impacts on assets managed by already efficient operators and in the business sector itself, “explains Javier Caro, director of Coliving at CBRE Spain.
Laia Comas, CEO of Inèdit Barcelona, explained that their business began to recover around October, with a rebound in demands. He added though, “reservations are made at the last minute, from one day to the next, whereas before reservations were forecasted, on average, three months in advance”. Between the months of October and December they reached an occupancy of approximately 60%, recovering earlier than expected. However the new wave of Covid cases in January and subsequent lockdowns, again caused reservations to be made last minute but they have succeeded to maintain an occupancy of approximately 60%, and forecast that between now and April they will be able to go up to 70%“.
Adapting to the current situation has been one of Inèdit Barcelona’s objectives. They decided to give maximum flexibility in making and canceling reservations. “In the rental contracts we have added the Covid Clause where it is indicated that if for any reason related to the disease you need to cancel the contract, you can do so without penalty or notice,” says Comas.”Coliving has aroused more interest because the first confinement was hard and many people prefer to be accompanied in a community and with a team, to support any inconveniences”.
Urban Campus agrees with Inèdit on this point. Marta Torres, Marketing Manager of Urban Campus, shared with us “we have quite a few testimonials from people who say that if they were to experience confinement again, they would still remain in our spaces”. The possibility of remote visits and check-ins, the use of technology to reduce capacity of common areas to 50% and fun but remote community events, are some of the measures that Urban Campus have put in place to guarantee the safety of the residents. Torres explains that “we avoided all check-ins until the state of alarm was lifted, because we did not want to introduce new people into the coliving”. “Since June we have been increasing occupancy thanks to the change from international to more national clients. We continue to have 40% of international demands but we have managed to increase the national ones”. In September they reached an occupancy of 90% and right now it is around 95%.
The pandemic has been a great catalyst for the Coliving concept. Javier Caro believes that during 2021 more international operators will arrive with force in Spain, creating thousands of beds, to respond to this movement. A demand that has been waiting a long time for a response. “We also think that there will be specialized coliving as has happened with the coworking market” explains Caro.
The impact of Covid has been uneven for coworking spaces, depending on the profile of their clients. “Those who had a lot of freelances in their clientele or organised many events, were impacted from the day one. Those whose clients were companies however, have suffered less and, in many cases, have managed to keep most of their clients,” explains Eduardo Salsamendi , President of the ProWorkSpaces Association. Salsamendi explains this difference by the increase in demand for flexible offices and coworking spaces by large companies. Multinational corporations are adapting their strategies by using workspaces in flexible offices, in order to improve the efficiency of their real estate footprint and increase the productivity of its processes “.
The giants of the coworking sector however have not stopped working because of the crisis: in total there are more than 20 new centres set to open up in the near future.
They may have temporarily lost some customers, due to the ease clients have to cancel contracts, but coworking operators have remained very proactive during the crisis and offered flexibility to their users. Thanks to this flexibility, many have been able to retain their customers”, explains Jesse Derkx, Agile Practice Director of CBRE Spain. The business sector, according to the experts, is slowly recovering since “many operators have reinvented themselves and offer solutions in accordance with current needs.”
Urban Campus have launched more flexible subscriptions: passes for days, half-days or smaller offices, in which users can rotate, are just some of the examples. Thanks to this they have seen positive results and have managed to increase occupancy to anywhere between 60% – 70%, whereas the average in the general market is at approximately 20% “.
In the case of LOOM, they have taken advantage of the months of confinement to create new ultra-flexible products called LOOM Solutions. These are flexible solutions that allow the user to sign-up by the hour and use those hours in any of the spaces in the LOOM network. This quarter the program is starting with three large companies, who will be rolling out their mobile workforces in the LOOM spaces for several hours. Speaking to us, LOOM explained that last year, part of their community was forced to abandon their workspaces, especially the companies most vulnerable to a crisis of such magnitude. However, since the last quarter of 2020, these types of companies (startups, independent professionals, some SMEs) are the first to return to the spaces, thanks to these new initiatives.
Rafa de Ramón, CEO of Utopicus explains the impact of COVID on their spaces: “There is no doubt that at the billing level we have suffered a considerable decrease, not only because of current customers but also because during these months we opened 4 new centres and Covid has slowed down its pre-marketing and disrupted the forecasts we had for the first half of 2020. Despite this spaces opened during Covid are at 50% of their total occupancy, with older spaces at their highest occupancy, around 70%.
Utopicus, who have 13 spaces distributed around the prime areas of Madrid and Barcelona, have included among its sanitary measures the registration of visits through tablets situated in the reception areas and the quarantine and disinfection of mail and correspondences.
Impact Hub Madrid noticed a reactivation of interest, in terms of demand for the spaces, between the months of August and October. “Many flexible, self-employed or freelance workers who had to cancel their reservations, returned,” says Sonia Felipe, Marketing and Communication Director of Impact Hub Madrid. “In the first months of the pandemic we lost around 60/70% of our flexible clientele and where we managed to maintain numbers was in landlines and offices”, continues Felipe. In addition, the she points out that there is new interest “from a handful of companies who had not before considered working in a coworking”. In support of its members, Impact Hub Madrid has also launched the HUB Impulsa program, which connects the companies in its network with expert organizations in different fields, to help them boost their business.
Some industry experts believe that the current situation may represent an opportunity to develop the coworking sector. Derkx explains, “Covid-19 is a blessing in disguise. After suffering cancellations, made easy by one of coworking’s main selling points, flexibility, the lockdown has generated a lot of interest for coworkings, as companies and workers realize that it is possible to work elsewhere than the office”.
Companies value the possibility of dividing teams and reducing the space of their headquarters
For his part, de Ramón assures that “there are many indicators that suggest that in the near future companies will have to get rid of rigid rental contracts to make their costs profitable, and therefore seek the flexibility of networks such as Utopicus. Salsamendi states that “companies are seeing the opportunity to include the division of equipment in their strategies and the possibility of reducing the surface area of their headquarters, using our centres as a third space,” says Salsamendi.
Looking to the future, LOOM predicts “we are seeing that corporations are moving towards a model in which there is a central staff, who go to company headquarters every day, and mobile staff who rotate, have shifts, telework some days and go to the office other days. The central staff will operate under the conventional office model and the mobile staff will operate under the flexible office model “.
Do you agree on how Coworking and Coliving have transformed in times of social distancing?