Interview with Dr André Helf, CEO of Collection Business Center Group
Coworking is the talk of the town. Whilst the ‘temporary offices’ niche has so far played a rather insignificant role in the German office property market, significant and long-term leases by major coworking providers have ensured that the sector is attracting increasing attention. Coworking operators continue to expand rapidly, buoyed by encouraging studies from major estate agents. But are they really getting ahead of themselves? Will the uncritical and optimistic growth plans of the major coworking operators lead to overcapacity? Will this result in cut-throat competition that ultimately leads to insolvencies and vacant office space?
We spoke to Dr Helf about this. Dr Helf has been working in the sector for over 20 years and is CEO of Collection Business Centre, a provider that has positioned its offering somewhere between co-working spaces and business centres.
Dr Helf, recently there have been increasing complaints from customers that the coworking centres of certain providers have more of a party atmosphere than a working one. Are you familiar with these complaints?
We have, of course, heard about this, as we constantly monitor the market. Pure co-working providers, which focus primarily on collaborative, creative work in an open, social environment with a campus-like atmosphere, naturally appeal to a very young target group. Free beer in the evenings and impromptu parties at work, with all the usual consequences, are certainly not to everyone’s taste.
What exactly goes on there?
Some co-working providers, for example, run beer bars or organise themed party evenings such as ‘Tuesday is Tequila Night’. Tenants are also permitted, amongst other things, to use the co-working spaces for celebrations, such as to toast a successful capital raise or other business achievements. In many cases, staff turn up the next morning with a hangover, and places that are meant to facilitate constructive work end up looking like they’ve been through a school-leaving party.
Recently, there have also been reports of additional services in co-working centres that many prospective tenants find rather disruptive. What is this all about?
Some providers want to project a particularly trendy image and have developed apps designed to help customers find their way around a new workplace. The basic idea is certainly not a bad one – but many of these apps store users’ birthdays, personal preferences or even the names of their dogs, in order to use the data for targeted advertising. This bothers a great many customers.
We’re hearing from the US that co-working providers there have also introduced other innovations which, for many customers, are more of a curse than a blessing. Are there any insights into this?
We know that at business centre locations such as New York, San Francisco or Toronto, providers are experimenting with offering tenants services such as private nurseries or flat-sharing agencies. In addition, there are reportedly relaxation zones with hot tubs or gyms. This may be useful or exciting for some. However, it has become apparent that a great many potential tenants are actually put off by such activities. For most people, it’s simply far too much of a distraction and far too lacking in seriousness.
What is your conclusion when you take a closer look at these new developments?
The offerings from pure co-working operators are aimed at a rather small target group: young people. As they get older, customers seek more professional, prestigious and discreet working environments. Anyone with reputable, international business partners cannot welcome these people amidst a haze of tequila and the smell of chlorine from a hot tub. I find it hard to believe that the hype surrounding pure co-working providers will continue in this way. Many co-working spaces are already standing empty, some providers are reporting annual losses running into the billions, and customers are increasingly realising that the ‘community’ concept is more of a nice marketing idea that offers plenty of distraction but little in the way of focus.
Dr Helf, how do providers such as Collection Business Centre distinguish themselves from typical co-working providers?
Collection Business Centre sees itself as a hybrid model that combines the advantages of co-working with those of business centres. Much like co-working providers, we let out fully equipped offices on flexible terms, but in a prestigious and professional setting. Naturally, we also offer open communication and workspaces designed to encourage our clients to get to know one another and collaborate. Discretion and tranquillity are our top priorities; we deliberately avoid a party atmosphere, instead prioritising attractive locations, luxurious facilities and professional support for work. Surprisingly, we are able to offer all this at prices that are no higher than those of pure co-working providers.
The interview was conducted by Mike Remmert.
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