Demand for co-working surges as businesses seek flexibility

In an era where businesses are increasingly having to navigate economic uncertainty, changing workplace habits, and evolving employment laws, demand for flexible space is surging.

New research from realcommercial.com.au shows “co-working” has become the most included keyword across both buy and lease searches over the past six months, suggesting a shift in how occupiers and investors are approaching their real estate decisions in 2026.

While co-working was once considered a niche offering, primarily aimed at freelancers and startups, it has evolved into a mainstream segment of the commercial property market.

Unlike traditional office leases where businesses commit to multi-year terms which require them to estimate space requirements well into the future, co-working allows businesses to expand or contract their footprint as conditions change. This flexibility has become increasingly valuable.

Global economic volatility, geopolitical tensions, changing workforce expectations and fluctuating operating costs have made long-term decision making increasingly difficult for many businesses.

Recent legislative changes in Victoria could also be contributing to the trend.

Workers in Victoria who can reasonably perform their roles remotely will be entitled to work two days a week from home starting 1 September 2026, or from 1 July 2027 for businesses with fewer than 15 employees.

While many businesses have already embraced flexible working, this creates another layer of uncertainty for businesses when determining how much office space they will need in future years.

This could be driving more businesses to turn to co-working solutions that provide greater agility on top of, or in place of, traditional leases.

And it’s not just occupiers that are increasingly embracing co-working.

Among those searching for “co-working” on realcommercial.com.au over the six months ending May, 47% were specifically looking to buy. This suggests investors and owner-occupying businesses are increasingly viewing co-working as a viable business model and use for commercial properties.

It’s also clear that offices aren’t the only commercial property type attracting interest from investors and occupiers looking for co-working spaces.

Among those searching to buy or lease co-working sites, 29% were looking for office or consulting suites, while 25% were searching for retail properties, and 15% were searching for warehouses.

This highlights the adaptability of the co-working model as a variety of property types can be converted into shared workspace environments.

As hybrid work becomes embedded, many larger organisations are also adapting their office networks, with growing adoption of flexible spaces to support project teams, hybrid workforces, and suburban locations closer to employees.

The economics are also attractive. With rents and fit-out costs becoming more volatile, co-working spaces can significantly reduce upfront capital expenditure while allowing businesses to avoid making long-term commitments based on uncertain future needs. This growing demand is translating into higher prices.

Australia’s median desk rate reached a new high of $705 per person in March 2026, up 7% year-on-year, according to Rubberdesk, with available floorspace falling over the same period. This is the reverse of the trend seen in Australia’s traditional CBD office markets where vacancies have increased over the past year.

Co-working is no longer seen as a niche alternative to traditional office accommodation. Instead, it has become a core component of Australia’s increasingly hybrid and decentralised workplace ecosystem. As more businesses seek greater agility and investors look for new commercial real estate opportunities, co-working looks set to play an increasingly important role.