- The pandemic has cut demand for the shared spaces when companies laid-off workers and sent others to work from home.
- Despite the little activity, the shared space providers see a return to pre-Covid demand because companies will shift to a hybrid arrangement for office use.
- Workstyle Africa, a flexible and co-working space provider, is gearing to open two more spaces in Nairobi, targeting a post-pandemic growth.
Co-working space companies were beginning to gain market share in Kenya, until coronavirus happened, causing untold turbulence but one that saw businesses firing on all cylinders to rise above the storm.
The pandemic has cut demand for the shared spaces when companies laid-off workers and sent others to work from home.
Despite the little activity, the shared space providers see a return to pre-Covid demand because companies will shift to a hybrid arrangement for office use.
Workstyle Africa, a flexible and co-working space provider, is gearing to open two more spaces in Nairobi, targeting a post-pandemic growth.
Flexible office penetration was estimated at 0.7 percent of total office space in Africa against 3.6 percent in New York City, 6.1 percent in Delhi and 5.0 percent in both London and Beijing.
Ronald Nyairo and Federico Von Bary in 2017 launched Workstyle when spaces offered were tiny and the clientele profile was nothing more than international organisations. “The first location was opened in February 2018. The second location opened in October 2019,” Mr Nyairo says.
“We have grown our capacity five times since we started and expect the business to gain 10 times by March 2021 compared to when we started.”
To remain afloat under the cloud of Covid-19, the company shelved expansion plans and went big on downgrades and discounts to secure the thin demand available after the disease lockdown.
Workstyle, under Landron Group, plans to provide an alternative to working from home concept that gained traction during the peak of the virus and is expected to remain in force after companies realised it could cut costs and motivate workers to be more productive.
Mr Nyairo says they have a mix of clientele, including international companies, start-ups, technology firms, high-growth and SMEs, NGOs and independent consultants.
The social distancing rules and minimal staff on rotation make large corporates choose them. “Going forward with people working from home, the changes in society are going to be good for us. Now people don’t have to work from office or be at the same place to be productive,” he adds.
Mr Bary says workers will not work from home forever as individuals and companies seek flexibility offered by co-working space.
“The future is hybrid,” he says. “This means that large companies will be looking for solutions that vary from month to month. I don’t think we are going to go back to having people work from home forever or people return fully to office, especially for large corporates with many employees.”
Co-working spaces offer different solutions to small businesses that find it difficult to acquire office space or looking for cost-effective options, individuals and SMEs requiring space for a few days.
The shared space market has been competitive with providers such as Nairobi Garage, iHub, Nailab, and The Hive.
Companies pay for big spaces but do not use it, explains Mr Nyairo. Meeting rooms are used for three hours a day, the kitchenette is occupied for three hours, and the reception area has three guests at a time but companies pay for 24 hours, he quips.
Post-covid, companies will shift from conventional offices to this new model, motivated by the savings. “This trend is on as companies are continuously moving from vertical organisation structure to horizontal structure where teams are supported to work together,” Mr Bary adds. Companies can also carve out space and customise such as Boston Consulting Group that picked on the trend to join spaces.
Workstyle Africa adds that this concept saves half the cost for similar Grade A traditional office through staff like a receptionist, cleaners and office administrator, electricity, internet, and other amenities.
A company operating Grade A traditional office is estimated to spend Sh173,600 per 1,500 square feet on a team of six staff on base rent. It would also spend Sh32,550 on service charge monthly, Sh129,600 depreciation mostly for furniture, fittings, and equipment.
Another Sh86,800 on expenses like internet, cleaning, office management, coffee, drinking water, printer, and office supplies, and Sh30,000 monthly on utilities such as electricity, water among others. This grows to Sh455,700, but Workstyle says the figure can drop to Sh227,850 under private office and Sh162,750 under co-working spaces.
“The hybrid model will help companies to work on a budget for people. Some clients want open spaces, some private offices, others multiple offices for separate teams or customised solutions, which is like the traditional offices except that we manage everything, including maintenance and cleaning,” he said.
The company says the co-work space providers have to get essentials such as design, air conditioning, furniture, and ambiance right.
Lounge for workshops, social media and career-oriented meetings, social events and hangouts, and coffee shops are some of the segments that the provider has to deliver.
The coffee shop menu has pastries, light snacks, coffee and beverages, not foods that would require fire because of restrictions.
Mr Nyairo likens the model to cab-hailing, accessed on need, and allows people to work from office or home when required.
"You have to be careful about location and quality. The whole area should help make the teams happier."