Why Companies Are Adopting the Space As a Service Business Model
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
In the world of real estate, the Space as a Service business model is gaining traction. With increasing demand for real estate spaces for working and living, companies are pushing the boundaries to come up with innovative solutions to maximize the use of available space. Over the last few years, players like Airbnb, WeWork, and Clutter have successfully monetized physical spaces.
Space as a Service is a critical component of the sharing economy that provides millennials the flexibility of living or working out of shared spaces without the headache of ownership or lease. Let us take a look at the reasons why this has become a popular business model in the real estate sector.
Most companies want to carry out their business operations in a cost-effective manner. A space as a service business model allows a company to work from shared office spaces on a need basis. The company does not have to maintain an office at all times but has the option of using an office should the need arise. Similarly, co-living spaces or micro rentals are attracting the millennials who are looking for temporary accommodation solutions at an affordable price. Users of the shared spaces do not have to incur additional expenditure on buying furniture or utilities. Instead, they can access all the amenities at a fraction of the cost.
In the digital age, companies prefer doing business on flexible terms. Using a shared space allows employees more flexibility as they can choose where they want to work from. The employees do not have to waste time commuting, which in turn results in higher productivity.
A co-living space also offers the tenants a ‘no-strings-attached’ accommodation option. Millennials are leaning towards these accommodations don’t generally involve a long-lock in period and they have the freedom to live as long as they need to.
Access to premium addresses
Owing to astronomical real estate pricing, it may not be possible for a company to lease or own an office or accommodation in the premium neighborhoods of the city. The share space business model gains significant brownie points in this aspect. Commercial office spaces and co-living spaces are located in prestigious areas.
Allows activity-based working
Companies want to ensure increased productivity levels of their employees and improve the employee experience. Using shared spaces enables a company to have a dynamic workplace where employees are not restricted to a single room. This fuels creativity and instills a sense of autonomy in the employees, which in turn drives the growth of the company. The company also gets the chance to maximize space utilization and reduce costs significantly.
The shared space model is tapping into the hidden potentials of real estate to provide attractive solutions to the ever-changing needs of the consumers. Research reveals that by 2030, 30 per cent of the corporate portfolios will be in flexible workspaces. Booming urbanization and shrinking square footage are paving the way for companies that can lease out furnished spaces to cater to the needs of the tenants.
If you operate in the real estate sector, opening your doors to this business model can allow dynamic growth and get you ahead in the competition. Space as a service model can help you make the most out of the available space. With the range of innovations possible in the real estate sector, there is no doubt that the model is set to be embraced by the majority of commercial real estate players.