The coworking industry was at the top of everyone’s lips due to the WeWork saga in 2019. This new system has offered people a suitable alternative to the traditional office environment with some added perks. Coworker defines coworking as thus,
Coworking is not just about the sharing of infrastructure and cost, it is about belonging to a community, accessibility, and sustainability. Coworking is a new way of working and sharing. Coworking spaces are designed to provide a productive and collaborative environment for their dynamic inhabitants and created without corporate constraints on what is perceived to be an “office” environment offering flexible memberships to suit most needs.
- Global desk prices dropped from $205 (Jan. 2018) to $187.
- Spaces grew to have an average of 12.7 private offices in them.
- Larger spaces are more favored, with African coworking spaces having a little over 86 people in them, compared to Asia’s 113 and North America’s 100.
- Africa has 381 coworking spaces, which is 12% of what is obtainable in Europe (3100).
Coworker lists 127 spaces in Nigeria alone, however, there are no official figures on what is obtainable or which are still active. From the analysis from a host of different web reports, websites and articles, here are insights into the coworking industry in Nigeria:
Growing demand for coworking spaces:
Due to the growing inflation in Nigeria and increased rent prices, there has been a growing demand for cost-effective office options. In 2019, vacancy rates in Utako, Wuse 1, Ikoyi, Victoria Island, Apo, and Maitama were 52%, 45%, 41%, 23%, 14%, and 12%. An additional 40,000m2 of office space was required, but due to the inability to meet up to rent obligations, coworking spaces have increased in demand. Proshare reveals in its Nigeria Real Estate Market Review that,
The growing demand for coworking spaces, especially in Lagos state, has encouraged conversions of grade B offices. Service providers are moving more into the ‘Space as a service’ model – upgrading, fitting out and managing grade B spaces to meet client specifications.
Growth of coworking spaces is driven by the tech industry and Millenials:
In the Proshare report, it was shown how the millennial demographic, tech start-ups, women-led enterprises, and SMEs have remained the leading drivers of demand for coworking office space. The truth is simply that the nature of work in the country is changing. With an uptick in the entrepreneurship lifestyle, lean teams have shown a preference for coworking spaces. Tech Cabal believes the future of work is flexibility, which is one of the key benefits of a coworking space, and in a 2019 article by Akindare Okunola disclosed that,
By nature, early-stage startups, with teams of less than 10, are inclined to take a different approach to work… co-working spaces are favored over full-time employees and rented or leased office spaces. This way startups are able to operate lean, be more productive and make employees feel more in control.
“Working from MEST Incubator Lagos instantly saves us operational costs as we don’t have to immediately rent an office, worry about electricity supply or internet, which are major start-up challenges in Nigeria,” said Dare, an entrepreneur whose startup, Chekkit, is housed at the MEST incubator in Lagos.
Coworking spaces are becoming mainstream, and the millennial demographic and tech industry will remain a driver. With unemployment rates expected to hit 33.5% in 2020, it is no wonder effective, flexible and cheap have become the ethos behind why these sectors are driving the coworking industry.
Growth of specialized hubs:
Briter Bridges and Afrilabs reported that in 2019, there were 643 estimated ACTIVE tech hubs in Africa, with Nigeria accounting for 90 of them. It was also found that amongst these hubs, 39% of them were coworking facilities, and this number has grown proportionally to the number of hubs. To meet up with this demand by the tech industry and Millenials, some coworking spaces have become even more targeted, focusing on specific sectors like fintech and fashion. Cre8 and 360 Creative Hub are firm examples of this trend of specialized hubs. Niche hubs are able to offer specialized business support services and networking opportunities. For example, Inlaks’ the hatch is focused on providing fintech entrepreneurs with co-working spaces to work from, funding and business development services to create viable business models.
Increased number of Northern coworking spaces:
Abuja has been the reason why more Northern cities are embracing the coworking trend, with Ventures Hub, Box Office Hub, and Civic Innovation Lab leading the pack. Box Office Hub has 1320 members and is continually expanding its services around the federal capital, providing entrepreneurs with services such as blending learning, hiring freelancers and access to events like Startup Grind. Outside Abuja, Colab in Kaduna and nHub in Jos have opened the core Northern markets. What is observed is that they are designed more as innovation centers that offer coworking facilities, as opposed to coworking spaces offering business support services.
During the last Nigeria Coworking Conference in 2018, the Vice President, Yemi Osibanjo said, “Sharing space is the least profound; it is in the birthing of creativity and innovation. Co-creation is by far the game-changing affair of the economy”. This is especially true and has been transformational in the Nigerian context. Despite a downward economic trend, entrepreneurship in Nigeria will grow and will fuel the need for coworking spaces in the country. In 2020, it is evident that not only will coworking become more popular, but the services offered may get specialized and offer more flexibility.