Coworking spaces as a new type of investment in property market. Case Finland

Purpose: Increasing phenomenon of flexible work and coworking spaces has created a buzz around office property market. Eventually, it attracted attention from investors. Despite the common discussion that coworking spaces are risky and not profitable, in Finland, we notice a phenomenon where large institutional investors run coworking spaces. With this study we aim at understanding why investors choose to enter the market by becoming operators of coworking spaces. Here we improve our awareness on coworking space market from investors’ point of view.
Design/methodology/approach: The study takes a qualitative approach. First, literature review presents current research on coworking spaces and real estate investment context. Then, data is collected through semi-structured interviews with specialists from 4 institutional property investors and analysed by using content analysis.
Findings: The study builds up the understanding of coworking space market from investors’ perspective. Investors see coworking spaces as a fraction in their stock and investment portfolios but having high potential due to different cost structure and a possibility to oversell the theoretical capacity of space compared to traditional office spaces. Main difficulties relate to relatively new concept, lack of space operators and valuation issues.
Practical implications: The paper provides an insight on investors’ perspective towards coworking spaces seeing it as a potential game changer in traditional office leasing. Their justification and point of view can be beneficial for all players by bringing in some certainty regarding this trend.
Originality/value: This is the first (up to authors’ knowledge) attempt to understand real estate investor’s perspective on coworking spaces. The concept of coworking is changing property market and creates new opportunities for traditional players such as investors, construction companies and similar, as well as provides possibilities for new players to enter the market.