Suburban Transit Hubs: New Opportunities for Working in a COVID-19 World?

CBD offices have undergone a massive change over the past couple of months as the response to the coronavirus pandemic forced many office workers to work remotely. CBD areas like Sydney and Parramatta changed almost overnight from thriving hubs of agglomeration and connectivity as people avoided public transport and office towers. More people are now using public transport to access the CBD and there are carpark incentives in some locations, but there is uncertainty about how long it will take to return to “normal’ or whether new ways of working and office structures will develop.


Coworking and COVID-19

Flexible offices such as coworking spaces have taken a big hit during the Covid-19 crisis to date, with initial pessimism for the sector but increasingly optimism as opportunities arise. In Sydney, most coworking hubs are located in the CBD and there are relatively few hubs in suburban areas. The sector is not uniform, with huge conglomerates such as WeWork at one end of the scale through to medium-sized operators with several locations and smaller, niche spaces.


Most have been struggling during COVID-19 and the focus has been on survival and retaining clientele – bridging the gap until they can return to profitability. There are already green shoots appearing with some locations reporting increasing enquiries and new tenants. However, there is also discussion about the medium term as CBD-based corporates and others rethink their physical office structure and consider options for their staff for the medium term until a vaccine is developed or perhaps as a new paradigm.


Suburban Spaces

The hub-and-spoke model of offices has often been championed but the reality is that the model has not really taken off in a big way. Notably, some of the big consultancy firms such as Deloitte and KPMG, banks and others have used this model in recent years. Some large corporations have tried but then reverted to a more centralised model.


While working from home during COVID has been an almost immediate success in enabling businesses suited to the model to continue with core activities, there are questions about its viability in the longer-term, particularly in terms of building and maintaining corporate culture. This is where a hybrid model of work comes into play – a mix of CBD office, suburban hubs and working from home. This can be managed to give employees solid protection from a public health perspective, balancing business imperatives with flexibility and safety.

There are a number of issues with businesses managing their own suburban hubs including:

  • Current leases on CBD offices are long-term and locked-in, meaning that any foray into suburban offices will mean paying double rent;

  • The uncertainty of the path and impacts of COVID-19 both domestically and internationally create a very uncertain economic environment. It would be difficult for a business to commit to a 5- or 10-year lease for suburban offices in the current climate.

Enter Coworking

While coworking operators traditionally take out a long-term leases on properties from building owners, they offer very flexible terms to their tenants. That is, in many cases they shoulder the risk. Models where landlords and operators reach a contractual agreement to share the risk but also share the proceeds will possibly give more certainty to operators to establish in suburban locations which do not currently have a strong coworking culture.


Operators are adept at issues related to public health and safety. This is their bread and butter. Spacing, hygiene and generally reducing risk are what operators do well and must do well if they are to retain clients and keep their business functioning.


For CBD-based businesses looking for suburban offices and trying to minimise financial risk and maintain a safe and healthy work environment, the opportunity to utilise coworking hubs makes a lot of sense. While these hubs in suburban areas might not yet exist in large numbers, one would expect that the market, particularly around transport hubs such as Parramatta, Strathfield, Chatswood, Liverpool, The Hills, Campbelltown and the Blue Mountains, will grow in the medium term.


For the foreseeable future there will be many uncertainties regarding the public health and economic environments, and nobody can tell where we may be 6 months down the track. However, there are opportunities for new ways of working that are not all one thing or the other. Hybrid models that value employee safety and welfare, but still core to the business culture. Coworking can be a key part of this new way of working.


For further information about this article and flexible workspaces contact:

© 2018 Regional Development Australia Sydney. All rights reserved.


Website by Mind My Marketing

  • RDA Sydney Facebook
  • RDA Sydney Twitter
  • RDA Sydney Google Plus
  • RDA Sydney LinkedIn