Freelancers and the Melbourne work space future

The number of start-ups, freelancers and entrepreneurs are driving the co-working industry with a 750 percent increase in Melbourne over the past three years, according to a new report by Knight Frank.

Knight Frank researcher Kimberley Paterson found 152 co-working spaces across Melbourne totalling 58,880 sqm with 16 new spaces totaling 13,000 sqm opening in 2016 to date.

She said co-working spaces account for 0.8 percent of total office stock across Melbourne with nearly 90 percent occupying secondary grade space with secondary grade and under-utilized stock well suited for this industry from both a cost and fit-out perspective.  

 “The majority of coworking operators across Melbourne, notably in the City Fringe, are located in converted warehouses or factories including decommissioned knitting mills, framing factories, woolsheds and heritage listed buildings,” she said.  

"The City Fringe has the largest volume of space occupied totaling 20,205 sqm, combined with the highest number of operators at 64. with the CBD having the second largest volume of coworking space totaling 16,935 sqm with 32 operators. 

"Co-working spaces account for 0.4 percent of total CBD office stock of which 62% of spaces are located in B-grade and C-grade stock, with 12.5 percent occupying space in prime grade assets.

"The North/West precinct has the second highest number of coworking sites at 36, accounting for 24% of total spaces across Melbourne while there are 12 coworking spaces totaling 3,630 sqm in the Inner East."

The average rental cost for a permanent desk space with 24/7 access in the CBD is $535 per month while in the City Fringe it is $460 per month.   

The report noted the substantial growth in co-working has been underpinned by advancements in technology, generational and structural economic changes combined with an increase of freelancers and small businesses growing by 1,842 companies since 2014, accounting for 87 percent of all Melbourne businesses.  

"The average occupancy size of coworking space across Melbourne is 385 sqm with 84 operators occupying between the 100-500 sqm size cohort," she said.

"There are 15 spaces occupying more than 1,000 sqm, with the largest operator - Hub Melbourne, set to occupy 3,900 sqm in October 2016 at the Mail Exchange Building, 693 Bourke Street in the Melbourne CBD."