In a 2016 Businessday Capital Market Development Annual Conference, the Director of Research and International Relations at the Nigeria Deposit Insurance Corporation (NDIC), Mohammed Umar, disclosed that Nigerians who have more than N500,000 in their accounts are just 2%. With increasing unemployment rates, insufficient income and declining purchasing power, analysts from Businessday have projected that Nigerians will relocate to smaller housing units in 2019. Industry experts, however, believe that for the commercial office space sub-sector, coworking spaces are the direction players are projecting towards.
Coworking spaces are shared workp spaces utilized by individuals of different organizations. They are the alternatives to traditional office spaces and in Nigeria, have risen in popularity in the last 3 years. The CEO of TrustBond Mortgage Bank has also noted that a lot of people do not mind sharing costs by working and living in small unit spaces going forward.
Lagos seems to be the hub for coworking spaces within the country, as every year, a dozen or more hubs spring around the state. At first, it was just an island phenomenon, with spaces like Venia Business Hub, Capital Square and Workstation. Then, more spaces were built on the mainland like Wennovation Hub, CChub, Leadspace and Musterpoint. However, now Abuja and a couple of other states have begun to experience the influx of these coworking spaces. In the capital city, there’s Ventures Park, Box Office Hub, and a host of other hubs in Abuja to choose from.
So why have coworking spaces in Nigeria risen to such prominence?
The major reason is affordability. Businesses tend to congregate around certain city areas due to the commercial nature of the town or closeness to market. When renting office spaces, most landlords charge as high as N60,000 - 100,000 per square meter in locations like Wuse II in Abuja or Victoria Island in Lagos. However, coworking spaces like Venia Business Hub in Lekki Phase 1, Lagos, has very affordable rates. From N30,000 per month for a hotdesk, N81,600/year for a virtual Office to serviced offices that charge as low as N130,000/month, entrepreneurs and organizations do not have to stress about the high cost of renting a suitable workspace for themselves.
Another important reason happens to be the flexibility of payments. In the traditional office spaces, landlords usually require 1-2 years rent upfront, but coworking spaces are open to different payment periods. A number of these hubs have daily, monthly, bi-annual and annual packages to accommodate different types of firms - from the newly-launched startups to decade-long organizations. For a space like Box Office Hub in Wuse II, Abuja, which is home to startups like Legit.ng (formerly Naij.com), RenMoney and BudgIT, the freedom in its payment plans enables it to attract a lot of different types of organizations. Entrepreneurs just starting operations or working remotely that need a virtual office for business signage and correspondence management can rent a space for as low as N150,000 annually.
A third reason is a potential for networking and collaboration. As opposed to the usual private offices, co-working spaces provide a community for different organizations to be a part of. Leadspace in Yaba, Lagos, champions this and has it as two of their core values - community and collaboration. According to them, …Valuable expertise could be just a few desks away, saving you hours of frustration spent researching and reinventing the best solution. In a private workspace, firms just have themselves to rub ideas off and build. However, when there is a congregation of people and businesses that your firm can easily reach out to or learn from, especially in a startup community like Yaba, it is highly beneficial to lean on that symbiotic relationship created by a coworking space.
Lastly, given the rise in popularity of software development in Nigeria, a lot of which is performed remotely, it is vital to have a workspace away from home and its distractions. Nigeria was named last year as the fourth largest growing developer community on GitHub, and the appeal for Nigerian developers has improved with Andela, and most recently, Lambda School. Coworking spaces cater to this class of individuals in the country. They provide shared workspaces and even private offices for these coders and remote workers, giving them an opportunity to be productive and free from disturbances that can be a mainstay for those working from home. As shown above, coworking has numerous advantages that have positioned it to be the workspace of choice for startups and growing businesses. Low costs, flexibility in payments, networking potential and a distraction-free provision for remote workers are shaping it to be not just a necessity for these businesses and entrepreneurs presently, but also as the future of work in Nigeria and the world, at large.