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In the world of real estate, the Space as a Service business model is gaining traction. With an increasing demand for real estate spaces to work and live, companies are pushing the boundaries to offer innovative solutions to maximize the use of available space. Over the past few years, players like Airbnb, WeWork, and Clutter have successfully monetized physical spaces.
Space as a service is an essential part of the sharing economy that offers millennials the flexibility to live or work in shared spaces without the hassle of owning or renting. Let’s take a look at why this has become a popular business model in the real estate industry.
Most companies want to carry out their business activities profitably. A space-as-a-service business model allows a business to work from shared office space on an as-needed basis. The company is not obliged to maintain an office permanently but has the possibility of using an office if necessary. Similarly, co-living spaces or micro-rentals appeal to millennials looking for temporary accommodation solutions at an affordable price. Users of shared spaces do not have to incur additional expenses for the purchase of furniture or utilities. Instead, they can access all amenities at a fraction of the cost.
In the digital age, companies prefer to do business on flexible terms. Using a shared space gives employees more flexibility as they can choose where they want to work from. Employees don’t have to waste time commuting, resulting in higher productivity.
A co-living space also offers tenants a “no obligation” accommodation option. Millennials lean towards these accommodations which usually don’t involve a long period of lockdown and they have the freedom to live as long as they need.
Access to premium addresses
Due to astronomical real estate prices, it may not be possible for a business to rent or own an office or accommodation in the upscale areas of the city. The shared space business model wins significant points in this aspect. Commercial office spaces and co-living spaces are located in prestigious neighborhoods.
Enables activity-based work
Businesses want to deliver increased levels of productivity to their employees and improve the employee experience. Using shared spaces allows a business to have a vibrant workplace where employees are not limited to one room. This fuels creativity and instills a sense of empowerment in employees, which in turn drives business growth. The company also has the opportunity to maximize the use of space and significantly reduce costs.
The shared space model harnesses the hidden potentials of real estate to provide compelling solutions to ever-changing consumer needs. Research reveals that by 2030, 30% of business portfolios will be in flexible workspaces. Booming urbanization and shrinking square footage is paving the way for businesses to rent furnished space to meet tenant needs.
If you operate in the real estate industry, opening your doors to this business model can enable dynamic growth and put you ahead of the competition. Space as a service model can help you make the most of available space. With the range of possible innovations in the real estate sector, there is no doubt that the model is on the way to being adopted by the majority of commercial real estate players.