Once explosive, co-working growth slows as sector matures

Sunday, 1 June 2025

Katrin Gravley thinks clients benefit when a group of health professionals work from the same practice, but she also likes the independence of working for herself.

That’s what led her to set up a health and wellbeing-focused co-working space.

Centred Studios, which opened in Ferrymead in Christchurch last August, has a pilates studio; five offices, two of which are treatment rooms; and a communal kitchen/dining space.

While one of the offices has been fully leased by a physiotherapist, the other spaces are available to health practitioners on a membership basis, and they can book the days and times they want to use them.

Gravley says the model they use is a bit different to traditional office co-working spaces which can be rented by the hour.

“Often, it makes more sense for health practitioners to commit to booking a day, or at the least half a day, and that’s what we’ve had happening so far.”

It is the first health co-working space of its kind in Christchurch, and it gives sole practitioners the chance to work collaboratively, save money on leases, and provide more options to their clients, she says.

“It is a direction I think we’ll see more like-minded groups of practitioners in the industry taking in the future. We’ve had quite a few enquiries and people checking out the space since opening.

“These are tough times, so some people are not ready to jump in yet. But we are growing slowly, and regular users include a deep tissue massage specialist, a psychologist, and a dietitian.”

The organisational model is being worked out as use of the space grows, but professional development offerings are something they will also look to provide in future, she says.

“It can get a bit lonely working from home or by yourself, so the chance to work and exchange with other practitioners on your own terms is an appealing one.”

Centred Studios is an example of a trend highlighted in a new report by Sharedspace, a listings platform for flexible space of all types, into the co-working and flexible workspace market sector.

That trend is a growth in niche spaces targeting specific industries such as health and wellness, creative arts, and fintech. There is even a shared space for commercial food operations, Kitchen Collective, in South Auckland.

It is a trend which comes at a time the co-working space sector is maturing, but also adapting to the challenging economic environment.

Sharedspace’s report shows that New Zealand has more co-working spaces than it did last year, but the rate of growth has slowed considerably.

There are now 205 co-working spaces across the country, up 6% from 194 last year, it found. But last year’s report showed the sector had an average of 22% growth every year since 2013.

Co-working spaces now have a footprint of 188,000m² nationwide, up from 169,000sqm last year, and 77.5% of spaces are locally owned. Within the total, 23 providers operate multiple spaces.

But the number of co-working spaces available in Wellington has taken a dive. There are now 25 spaces in the region, down 35% from 39 last year.

Sharedspace.co.nz founder Matt Knight says the liquidation of Digital Nomad, which had 11 co-working spaces, played a big part in the decline, although market conditions seem a bit bleaker in the capital.

“Wellington commercial properties have double the rates, operating expenses and so on as Auckland. So it’s more expensive and that impacts because operators can’t make the costs add up.

“It also means that in Wellington, someone pays the same amount for a lesser grade space than they would for a premium grade space in Auckland.”

Conversely, the number of spaces was up in other regions, including Northland and Waikato, which now have 10 and 22 spaces, after increases of 100% and 37% respectively.

In Auckland the number of spaces available is up 14% to 72, and includes global operator IWG’s latest offering in the old New Zealand Herald building and The Formery, both on Albert St in the heart of Auckland’s CBD.

Canterbury now has 20 spaces, an annual increase of just 5%. They include QB Studios’ newest space on High St in Christchurch.

Knight says people are slowly coming back to the office, but hybrid work is now the norm, and that’s left businesses being more intentional about how they use office space.

“Co-working is no longer just about freelancers or start-ups, it’s become a strategic solution for companies of all sizes adapting to hybrid work.”

But co-working is also not just about desks anymore, it is about people, flexibility, and creating spaces that feel good to be in, he says.

That has led to a decline in permanent desk occupancy in co-working spaces, but a noticeable increase in flexible memberships and an 18% increase in hot desk memberships nationwide, the report found.

Knight says it is understandable that if a business only has people working in an office a couple of days a week they do not want to pay for a full week.

“It’s less lucrative for providers, but it is a reflection of the growth in hybrid work and related changes, and the fact that people just want to pay for what they use, not more.

“Using co-working space like this also gives companies the ability and flexibility to scale up or down according to how their business is going.”

Another trend the report picks out is a stronger focus on provision of extras such as fitness centres, along with community-building, with over 75% of operators now hosting regular social and networking events.

It is about tempting people back into the office, and it is not just the workspace people are interested in, it is all the other features, he says.

“So if gyms and wellness centres and events are what needs to be provided to keep people from staying at home, I think that will be a continued push in that direction.

“And providers will need to ensure they have the right mix of location, price, workspace offerings, and additional amenities and attractions. It’s all about the changing nature of space and work-culture.”

Knight says 40% of providers are planning to expand, and while that is down on last year, it does indicate some confidence in the market.

Some of the co-working spaces scheduled to open this year include Precinct Properties’ Generator Pipiri Lane in Auckland’s Wynyard Quarter, and IWG’s Regus space at 125 Queen St in Auckland’s CBD.

IWG has also announced it will open its first Spaces centre in Wellington, at 86 Custom House Quay, a heritage-listed character building.