Skanska has terminated the operation of its coworking company Business Link in Prague. Its premises in the Visionary office center in Holešovice were taken over by the Czech company Scott & Weber. This is the first such large case in the domestic market where one coworking operator has swallowed another.
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“We must constantly adapt the Business Line’s business activities and projects to the rapidly changing needs of the market and the expectations of our clients. The role of offices and their functioning has undergone a fundamental change as a result of the pandemic. The termination of the activities of the Prague Business Link is the result of the evaluation of these factors, “said Maciej Król from the Business Link management. The company will focus only on the domestic Polish market.
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Scott & Weber took over the competitor’s activities with all the commitments. The price of the transaction was not disclosed by either party.
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Czech Scott & Weber has been strengthening at the expense of foreign competition for a long time. While, for example, the global coworking giant WeWork has limited itself to a single building in Prague, contrary to the original big plans, Scott & Weber is opening one new location after another. Among other things, he opened the center in the new building The Flow Building on Wenceslas Square directly above the shop of the clothing chain Primark. WeWork originally stood for these spaces.
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Further expansion
“In the coming months and years, the position of the strongest players will be strengthened, not only by organic growth, but also by property acquisitions. This will consolidate the market, reduce the number of players in the market and thus the desired qualitative shift in the services and environment offered, “predicts Scott & Weber owner Adam Zvada.
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By the end of 2023, we plan to operate a total of 13 centers.
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Zvadova’s company plans to sign contracts for another three locations of serviced offices and coworking by the end of this year. “By the end of 2023, we plan to operate a total of 13 centers with a total area of more than 35,000 square meters and a capacity of over 5,000 jobs,” added Scott & Weber.
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According to the consultants, the expansion plans make sense. “The market of flexible office operators has not yet reached its peak and there is room for other centers, however, the location is crucial for their growth and success. It is still clear on the market that tenants perceive positively, when a part of a traditional office building is also a flexible part, “says Radka Novak, an office rental specialist at the consulting company Cushman & Wakefield.
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Unlike traditional offices, companies and individuals rent coworking offices only for a short time. They usually conclude the contract with the coworking operator, not with the office owner. Renting such space costs more than with conventional office space, but users do not have to worry about running offices. In addition, the premises are often originally furnished and sometimes resemble a more informal setting somewhere in the bar than a classic workplace.
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Grow after the slump
Last year, during the first lockdown, demand for this type of office fell for a short time. However, she recovered quickly. This is partly due to the fact that the demand for coworking has shifted from start-ups to the benefit of ordinary companies. For example, they can conclude contracts with coworking operators for only a few months and then cancel the contract. Traditional offices are usually rented for at least five years.
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“Demand for flexible offices has increased mainly from larger corporations, which are also mostly moving to larger operators offering more locations. The companies are trying to bring their employees closer to their work at home, “commented Novak from Cushman & Wakefield.
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This is also the reason why the development part of Skansky does not give up the further creation of coworking spaces, despite the failure with the domestic part of Business Link.
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“In the Czech market, there is a growing interest in dual and hybrid office solutions, where companies complement traditional offices with flexible spaces in or near the same building. We expect that the flexibility it gives companies will be a new trend, and to meet such demand, we will continue to reserve up to 25 percent of space in our office buildings for flexible office operators, “said Skanska Property Manager Jana Prokopová.
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Prior to the acquisition of Business Link’s activities, the Czech Scott & Weber was the market leader for flexible and coworking offices, according to current data from consultants from Cushman & Wakefield. The second market is the international company IWG. This also includes the third place with a separate coworking concept Spaces.
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