Interview with Dr André Helf, CEO of Collection Business Center Group
Coworking is on everyone’s lips. 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 is the sky really the limit? 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 Center, a provider that has positioned its offering somewhere between Coworking 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 Coworking 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 the usual consequences, are certainly not to everyone’s taste.
What exactly goes on there?
Some Coworking 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 Coworking spaces for celebrations – for instance, to toast a successful capital raise or other business achievements. Often, staff turn up the next morning with a hangover, and spaces that are meant to facilitate productive work end up looking like the aftermath of a school-leaving party.
Recently, there have also been reports of additional services in Coworking 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 many customers.
We’re hearing from America that Coworking providers there have also introduced other innovations which, for many customers, are more of a curse than a blessing. Is there any insight into this?
We know that at business centre locations such as New York, San Francisco or Toronto, experiments are being carried out to offer tenants, for example, 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, it’s simply far too much of a distraction and far too lacking in professionalism.
What is your conclusion when you take a closer look at these new developments?
The services offered by pure Coworking 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 into a haze of tequila and the smell of chlorine from a hot tub. I find it hard to believe that the hype surrounding pure Coworking providers will continue in this way. Many Coworking 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 Center distinguish themselves from typical Coworking providers?
COLLECTION Business Center sees itself as a hybrid model that combines the benefits of Coworking with those of business centres. Much like Coworking 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 work together. Discretion and tranquillity are our top priorities; we deliberately avoid a party atmosphere, instead prioritising attractive locations, luxurious facilities and professional work support. Surprisingly, we are able to offer all this at prices that are no higher than those of pure Coworking providers.
The interview was conducted by Mike Remmert.
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