The coworking market - France

1.2 Rapid global expansion

Number of coworking space users World, **** - *****, in thousands CAGR: +**.** Source: ****

The global coworking market is growing at an exponential rate; between **** and ****, the number of people in coworking spaces is expected to increase at a CAGR of **.*% per year, reaching almost *.** million in ****. Several factors are contributing to the growth in shared office spaces: the relaxed environment, often different from a traditional corporate office, is increasingly appealing. In addition, a co-working space can be seen as a networking hub, where several people and companies sit under the same roof and can share projects and ideas. Last but not least, the structure allows great flexibility; whatever the size of the company, seating can be rented very easily and at relatively low cost.

Number of coworking spaces World, **** - ***** CAGR: +**.**% Source: ****

The chart above confirms the trend of a rapidly expanding market that is set to increase with a CAGR of **.*% to reach almost **,*** by ****. This growth is correlated with an increase in demand.

Developing economies are a strong future market

According to Challenge, by **** the coworking market will concern * to **% of workers in developed economies Growth will be particularly strong in China (***). In Europe, growth is estimated at between **% and **%, depending ...

1.3 Explosive growth in the French market

Number of coworking spaces France, **** - **** CAGR: +*** Source: ****

In France in ****, there will be an estimated *,*** coworking spaces, representing strong growth since **** (***) when only ** locations could be identified.

To estimate a market share in France, we assume an average monthly cost in France of €*** based on prices between ****-**** in Paris and the regions, and for open spaces and offices. [***]

This leads us to a French market of *.** billion euros (***) in ****. This figure must be analyzed with caution, as it is based on numerous assumptions. Moreover, with this in mind, Les Echos newspaper estimates the market size at *-*.* billion euros in ****.

In this respect, it is estimated that flexible working could account for between **.* and **.*% of jobs in France by ****. This is equivalent to an **% increase on current levels. Growth drivers include several factors such as productivity gains; indeed, in collaborative workplaces, professional equipment is made available, and it is ergonomically designed for the utmost comfort of users, who can then be more productive. What's more, the ecosystem surrounding coworking is rich, with a wide range of companies operating in several fields with a diverse amount of ideas, perspectives and assets, all contributing to innovation and new ideas. What's more, ...

2.1 Profile analysis: The French consumer

Professionals appreciate central locations

What do you think is the ideal location for coworking? France, ****, in Source: ****

In ****, the majority of respondents (***) wanted local transport, particularly by train.

2.2 Who uses shared workspaces?

The big picture

Professional use of coworking spaces varies widely; traditionally, start-ups or telecommuters are the main users of these premises. However, large companies also use this service. Companies from all sectors, including industry, financial services, real estate and banking, are included in the customer segment. [***] Indeed, Actionco reports that co-working spaces can be up to **% cheaper than traditional offices. In this section, we detail who these users are.

Who uses coworking spaces? World, ****, in Source: ****

A global survey revealed that SMEs account for around **% of coworking space customers, followed by just over a quarter (***) represented by start-ups. The smallest customer segment is made up of large operators.

Self-employed

Demand is initially made up of self-employed workers who "reside" in workspaces. This implies a B*C relationship. In general, this demand is mainly fueled by the advent of Generation Y, where a growing number of people are self-employed, whose requirements in terms of working environment are constantly changing. This generation has a new relationship with work, technology and innovation. Indeed, the self-employed are attracted by mobility and autonomy, and are often looking for a community, where the environment is affected by collaboration and business stimulation. Around **% of co-working space customers are ...

2.3 Demand trends

The transformation of French offices

In ****, what type of office will you be working in? France, **** & ****, as % of total Source: ****

French offices are increasingly embracing collaboration. The chart above shows the response of *** companies, where it is estimated that by ****, coworking will account for **% of the office market in France, an increase of eight percentage points. In addition, head offices are expected to experience a sharp decline of **% up to ****, leaving more room for shared office solutions.

Rising demand for offices over *** square meters

Cushman reports that among the most dynamic segments of the office market are offices over ***m². For example, between **** and ****, demand increased by **%, measured by transactions for this size. Even more spectacularly, between **** and ****, the equivalent number was ***%, and ***% between **** and ****. The result is an increase in demand from large companies to rent office space for their employees.

From collaboration to co-living?

Coliving can be seen as an extension of co-working: it is defined as a communal lifestyle linking colocation and coworking, in a sharing of living spaces (***), workplaces and entertainment venues.

The following figures are indicative of this trend: [***]

**% of millennials aspire to be more flexible in their work; In major cities, millennials spend **% of ...

2.4 COVID-19 and collaboration

The impact of Covid-** on businesses operating in the coworking market has been extremely high and has exposed significant pitfalls in business models. Due to movement restrictions and limitations on gatherings, collaborative workspaces have been more or less completely abandoned. Written protocols state that "tenants are asking if they can delay rent payments, leaving owners scrambling to cover their own mortgages and fend off cash-hungry banks." Indeed, cash flows are rapidly diminishing. This is particularly worrisome for small businesses that have fewer capital reserves and, therefore, shorter lifespans. A study by Collaborateur revealed that out of the **,*** coworking spaces surveyed across *** countries, **% reported a significant decrease in the number of clients working in their facilities due to COVID-**. Additionally, **% of coworking spaces reported that the virus had a negative impact on membership and contract renewals. Lastly, **% of respondents stated that they had observed a decrease in the number of new sign-ups. Companies like WeWork are caught between long-term fixed leases and flexible contracts with clients.

2.5 Analyse de l'audience

Décomposition de l'audience par âge France, ****, % Source: ****

L'analyse des données indique que l'audience du marché étudié est principalement composée de personnes âgées de ** à ** ans (***). En revanche, les tranches d'âge supérieures à ** ans sont nettement moins représentées dans l'audience du marché étudié par rapport à leur proportion dans la population française, en particulier les ** ans et plus qui ne représentent que *,**% de l'audience contre **,**% de la population générale.  Décomposition de l'audience par sexe France, ****, % Source : Semrush   L'analyse de l'audience du marché étudié montre une tendance globale dominée par une présence féminine plus significative. En effet, les femmes représentent **,**% de l'audience totale, contre **,**% pour les hommes. Cela indique une légère prédominance féminine dans l'audience de ce marché.  Décomposition de l'audience par sexe et âge France, ****, % Source : Semrush   L'analyse des données montre une tendance globale où les femmes ont généralement une participation plus élevée que les hommes dans toutes les tranches d'âge étudiées. Les femmes représentent plus de **% de l'audience dans chaque groupe d'âge, avec une proportion la plus élevée dans le groupe des **-** ...

3.1 A competitive environment with many new entrants

The coworking value chain in France comprises three types of players: Property owners and office property companies. Their business model revolves around rent collection. Companies specialized in coworking also offer complementary services, such as catering and security, which in turn employ people. Finally, the third part of the value chain includes players in space optimization and market solutions. Source : Custom magazine  

3.2 Distribution of coworking spaces

Coworking space distribution France, ****, in m* Source: ****

Above is a breakdown of the number of square meters for each company. Global giant IWG - which owns Regus (***).

Breakdown of coworking space by surface area France, ****, in Source: ****

The graph above illustrates the distribution, in terms of m² of shared office space in France ****. The distribution is globally balanced: **% of coworking spaces are under **k m² and **.*% are over ***k m² (***).

3.3 Paris and Ile-de-France at the heart of coworking spaces

Number of workspaces by region France, ****, in numbers Source: ****

The chart above shows that Paris and the Île-de-France region will dominate the number of co-working spaces in **** in France. Nevertheless, co-working is spreading throughout France: Bordeaux, Nantes, Marseille and Lyon in particular have seen increased growth in recent years. Compared to ****, the Ile de France (***) will see the strongest growth, according to Republik Workplace.

Source: ****

Finally, it should be noted that the market for collaborations and incubators in France is not only highly concentrated in the Paris region, but even more so in the Paris hypercentre.

3.4 The coworking business model and associated risks

Exposure to real estate

In ****, the president of the Boston Federal Reserve stated that "... in the event of a recession, a company specializing in the coworking market would be exposed to the loss of income from tenants, which puts them and the landlord at risk if they can't pay rent to the building owner." [***] In return, coworking businesses could find themselves without cash and without the ability to pay landlords. Two scenarios can arise in such cases: firstly, if contracts with the real estate company are signed on a long-term fixed basis, coworkers must continue to pay landlords even though they have no income. Secondly, if the contracts are short-term or flexible, this will put considerable pressure on the income of the owners of the premises. In both cases, the coworking company faces financial difficulties, and in the latter case, this could also lead to a collapse in property prices.

What type of contract do you use? France, ****, in % Source: ****

The chart above confirms that contracts in company-customer co-working spaces are short; in one survey, **% said they had monthly contracts, while **% had daily contracts. Annual contracts occurred in less than a third of cases.

The case of WeWork

In ****, WeWork was ...

3.5 Où développer des espaces de coworking en France ?

Les tensions sur le territoire Français ne sont pas les mêmes que l'on soit dans telle ou telle grande ville. Un indicateur intéressant pour déterminer le niveau de tension d'une grande métropole quand il est question de coworking est le ration Offre/intentions de recherches. On obtient un chiffre compris entre * et *: Plus on se rapproche de * moins le marché est sous tension, plus on approche du *, plus la tension augmente.

Ce graphique illustre les tensions sur le marché de l'offre de coworking en France en ****, en prenant en compte le ratio entre l'offre disponible et les intentions de recherche. Les valeurs proches de * indiquent des tensions élevées, signifiant une offre insuffisante par rapport à la demande. À l'inverse, des valeurs proches de * traduisent un marché moins tendu.

Les régions Hauts-de-France et Provence-Alpes-Côte d’Azur présentent les ratios les plus élevés (***) montrent des tensions significatives, suggérant un déséquilibre où la demande dépasse largement l’offre.

En termes intermédiaires, la Bretagne (***) traduisent un certain niveau de pression.

Pour réduire ces tensions, il serait judicieux de prioriser l’expansion des espaces de coworking en Occitanie et dans le Grand ...

3.6 L'Offre de bureaux disponibles, un frein pour les opérateurs du coworking.

Dans la carte qui va suivre, les chiffres indiqués sur une régions correspondront en fait à la métropole associée: Par exemple : Ile de France: On comprendra Paris.

Le développement des opérateurs de coworking en France est étroitement lié à la disponibilité de l'offre immobilière de bureaux. Dans certaines métropoles, la faible densité de bureaux disponibles constitue un frein majeur à l’implantation de nouveaux espaces. En particulier, les villes comme Marseille, Toulouse ou Strasbourg, où le taux de vacance à un an est inférieur à * %, illustrent bien cette problématique.

Ce déficit d’offre immédiate limite les possibilités de prise à bail ou d'achat par les opérateurs. À l’inverse, des villes telles que Lyon, Bordeaux ou Lille, grâce à une politique de construction ambitieuse pour les trois prochaines années, promettent un renouvellement de leurs parcs immobiliers et une fluidité accrue sur le marché. Toutefois, même dans les zones où des efforts sont en cours, les tensions peuvent rapidement se renforcer, comme à Montpellier, Nantes ou Rennes, où les parcs immobiliers restent de taille modeste et le ratio offre/demande assez tendu.

Cette carte illustre l'offre de bureaux dans les grandes métropoles françaises ...

4.1 Service overview

Coworkers are companies that rent out workspaces (***). They also offer support services. Below is a breakdown of these services.

Coworking's basic service is to provide two types of workspace

Open space: open areas for working in a dynamic, stimulating atmosphere Closed offices: quiet areas integrated into a common space

In these spaces, you'll often find everything from pens to computer equipment.

In addition to workspaces, work zones offer services in common areas

Equipment: office supplies, printers, computer screens, etc Catering: "snacks" (***), Concergerie (***): lockers, dry-cleaning, etc Sports rooms (***): yoga classes, fitness classes, etc Use of communal areas: lounges, terraces, rooftops where different users can meet

4.2 Pricing

The aim of this section is to provide an overview of office rental prices, and to point out that prices differ from country to country. In particular, Paris is more expensive than the rest of the country due to higher real estate prices. In addition, there is a difference in the monthly price of open-plan and closed-plan offices.

Cost ranges per item (***) in Paris' main tertiary zones in Q* ****

Source: ****

The map above details the price of coworking spaces (***).

Regional price differences and surface area

Estimated average rental value of a private office in a high-end workspace, in m²/year with *, * and ** m² per workstation France, ****-****, in € Source: ****

The graph above represents the average prices charged by coworking spaces worldwide and in major French cities. It can be observed that prices are very high in London (***) and to a lesser extent in Berlin. The cheapest prices are found in provincial areas, where one can find luxurious open spaces for around €***/month.

An offer that evolves with the arrival of new entrants and real estate prices

Finally, it should be pointed out that the arrival on the market of new entrants (***) is the first factor that can influence prices: the multitude ...

4.3 Expenses related to coworking space management

Breakdown of coworking companies' cost centers France, ****, in Source: ****

We can see that the biggest expense item for coworking businesses concerns rent (***).

4.4 Supply trends

Given that pure players first penetrated the market in France (***), the spread of coworking in France today is mainly due to the fact that traditional real estate giants are diversifying their offerings. Here are just a few examples:

Nextdoor is a joint venture between AccorHotels and Bouygues Immobilier; Espaces from business center specialist Regus; Wellio a Covivio brand.

Differentiation is now being played out in the race for shared office services: these are becoming increasingly sophisticated, and companies are adding value by developing them. For example, Kwerk and The Bureau offer top-of-the-range coworking services, with catering services (***).

Finally, players such as Bureaux à partager now offer extended services to colleagues' clients as well as to the workspaces themselves.

5.1 Regulations

As the legislation currently stands, coworking centers are only legally bound by the French Construction and Housing Code (***).

The PACTE law, or "Plan d'action pour la croissance et la transformation des entreprises" (***). This could increase the number of workers interested in coworking spaces.

In addition, the creation of an innovation fund of around ** billion euros in France is a legislative groundwork that encourages entrepreneurship and innovation, and offers great opportunities for collaboration, which should welcome a growing number of self-employed workers.

Legal status

The choice of legal status for your coworking space depends on a number of factors, including whether you're opening on your own or with associates, the tax regime you want, the protection of your personal assets and the social regime for managers. If you're the sole partner, you can opt for an individual limited liability company (***). It is also possible to choose the status of association to benefit from tax exemption, but this implies constraints such as opening up to several people and reinvesting profits in the project. If you choose to set up as an association, you will not be able to withdraw your start-up capital if you cease operations, and you will have to sell your ...

6.1 Player segmentation

• La Cordée
• Wojo
• WeWork
• Spacesworks (International Workplace group)
• Wellio
• Morning Coworking
• Kwerk
• Multibureau
• Giboire groupe
• Industrious Office
• Start way (La poste Immobilier)
• DIGITAL VILLAGE Coworking
• THALES DIGITAL FACTORY
• Vinci Immobilier
• HÉMÉRA
• Bureaux à partager
• IWG Regus (International Workspace group)
• Ateac
• Insitu Groupe
• Bureaux and co
• Now Coworking
• La Ruche CoWorking
• Coworkings communautaires
• Cardinal Groupe
• Cowool
• Deskeo
• BMG Groupe
• The Bureau