UAE & KSA

Transforming Spaces
2019
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Introduction
The days when cubicle office plans reigned supreme have passed. Fuelled
by technology and underpinned by a pursuit of well-being, the new genera-
tion of spaces demand a holistic approach taking into consideration cultural
and economic trends. Barriers to productivity, including lengthy commutes
and a need for face-to-face meetings have been thwarted by advances in
technology. People can now work remotely, shop securely and engage
across borders, embracing not just a new way of working, but of living.

Armed with smart phones, social media platforms and connectivity, unique
experiences are taking centre stage. In a highly competitive market, where
employers strive to retain employees, companies are embracing new ways
of working. With a focus on unique experiences, engaging facilities and
technology-equipped spaces, real estate is being pushed further than ever
before. As owners, occupiers and service providers clamour towards new
models offering agility, convenience and value, today, a quarter of compa-
nies anticipate migrating towards activity based, unassigned workplace 
strategies to meet the evolving needs of talent and workstyles.

These and other macroeconomic factors are consistently shaping the real
estate landscape across all sectors, but most notably in the office and resi-
dential markets, where new real estate formats have gained traction global-
ly and within the region. Our report will explore two key development types
in more detail to understand what is driving these changing landscapes and
how this impact is being witnessed across the Middle East.

Flexible Offices Coliving

& Coworking

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Flexible Offices &
Coworking
Flexible office has become a catch-all term to encompass any
office space leased for a short period of time, whether on a desk
basis or on a larger scale.

In recent years, flexible office space operators have expanded rapidly

across the globe, with new Coworking locations increasingly popping up
within the Middle East. At the outset, Coworking and flexible office space
was primarily catered to up-and-coming entrepreneurs and freelancers.
However, changes in the economy have affected corporate occupiers’
approach to real estate decision-making, leading to a growing need for
flexibility within portfolios, even among the more traditional office
tenants.

Most Flexible

Meeting/ Incubator/ Serviced

Coworking
Event Space Accelerator Offices

Free-lancers Entrepreneurs
Key Client
Segment

Entrepreneurs Sales & Regional

Start-ups SMEs
Start-ups Offices
SMEs Large Enterprises

Convene Servcorp
Providers

Breather BetaWorks
Global

Industrious Regus
Convene TechStars
WeWork Virgo

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 Most Permanent

Enterprise Short-term Long-term

Turnkey
Office Solutions Lease/Sub-lease Lease/Own

SMEs SMEs SMEs SMEs

Start-ups Start-ups Start-ups Start-ups
Large Enterprises Large Enterprises Large Enterprises Large Enterprises

Industrious Regus
Knotel Spaces Owners Owners
Regus Knotel Large Corporates Large Corporates
WeWork WeWork

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Key Drivers
Consumer
mindset
Consumer mindset - Where start-ups and
SMEs are going, traditional office tenants are
following. Flexible office space helps in
securing the best talent, which drives innova-
tion and the future productivity of their
businesses.
Technology
Mobile devices, cloud computing and other
enablement technologies allow employees to
work untethered throughout their day. The
right tools and connectivity allow employees
to be more productive, no matter where or
when they work.
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Dynamic
landscape
Expectations and opportunities are shifting as
owners, occupiers and service providers turn to
new models, with agility at the core. A demand
to deliver highly effective workplaces, differen-
tiated assets and optimized portfolios - yield-
ing more value for the organizations and the
people they serve - is driving real estate as the
landscape of work continues to evolve.
Cost
Both entrepreneurs and corporate occupiers
are consistently looking for ways to reduce
operational costs in line with their business
requirements. In addition to responding to
employee needs, flexible offices are seen as
an enabler of cost reduction and agility
within corporate real estate portfolios.
How Does it Work

Traditional lease model

Lease a large amount of space on traditional leases to
flexible office operators on market terms.

Platform model
Investors set up their own platforms, provide the services themselves
and engage directly with the occupier community.

Profit/Revenue share model

Comprises a lease structure with a base rent and turnover guaran-
teeing some level of rent by a service operator, then an additional
variable income dependent on the success of underlying serviced
office business.

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What Do Occupiers
Look For?

Vibe
While start-ups and those working in creative industries are known
to benefit from the vibe and collaborative atmosphere afforded by
flexible working spaces, many corporates have yet to achieve the
desired balance. Excessive noise and poor-quality design still
hinder the closing of the gap between current provisions and what
corporates need.

Scale
In line with this trend, CBRE’s recent survey of corporate respon-
dents indicated that flexible leases made up only 7% of current real
estate portfolios, a relatively small part. Though not growing at the
same scale as among entrepreneurs, providing the right offer
which caters to the needs of traditional office tenants is likely to
increase this percentage in the future.

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Model
Solutions are rarely “one size fits all,” and coworking models are
no different. Entrepreneurs who adopt more agile working practic-
es benefit from a membership model, where they simply pay for
what they use. Corporates with established brand identities and
practices struggle to secure a flexible space where they can grow
and establish themselves in the face of constant change. Flexible
office space which enables large corporates to take up space while
remaining in line with their brand ethos is expected to flourish
among traditional office tenants.

Cost
Affordability has always been a key factor in attracting entrepre-
neurs to flexible spaces. Being able to pay as and when needed
can offer much by way of cost savings. In the case of traditional
corporate tenants, lower costs are key in an increasingly competi-
tive environment, where cost is a key decision driver.

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Key Regional
Projects

Operators, such as Let’s Work, provide a subscription-based model,

wherein subscribers have access to a variety of locations, which include
coworking spaces, hotel lounges, warehouses, restaurants and cafes.
As part of their packages, users benefit from unlimited refreshments and
wi-fi, reserved seating, free parking, discounted F&B and a convivial
entrepreneurial vibe. Moving forward, the types and number of flexible
workspaces is expected to continue increasing in line with sustained
demand for agility.

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The number of flexible office /
Coworking locations across the
region is continuously expand-
ing as demonstrated on the
following page, which highlights
key existing offering across the
UAE and KSA.

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 UAE
Operator Abu Dhabi Dubai No of locations
Astrolabs 1
BeeHive
ClearHub
coREACH
Forward Business Incubator 1
Impact Hub 1
Jovia
Kayan
Krypto Labs 1
Launch Pad 1
Let’s Work 36
Loft+ Workspace
myOffice 3
NEST 1
Nook 1
One Business Centre 2
Ourspace 1
RAED Coworking Space
Re – Urban Studio 1
Regus 18
Servcorp 6
Smart Offices
The Bureau 1
The Coworking Pop Up 1
The Space
UnBox 1
Vibes
WeWork * * 2
White
Witwork 24

Yes * Coming Soon Meeting Rooms Innovation Labs

Coworking Flexible Offices Serviced Office

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 KSA
Jeddah Riyadh DMA No of locations Type
1
1
2
1

1
1

1
1

1
1

15
9
1

* 2
1
1

Events Virtual Office Innovation Incubator Innovation Hub

Business Incubator Think Tank Incubator Workshop

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Coliving
As the sharing economy continues to grow across the globe, sharing
space with others is becoming an acceptable choice for everything from
transportation, with the rise of car sharing services, coworking, to
accommodation, and developers are responding to these changes.

Particularly among millennials, there is an increasing demand for

flexible, cost-effective living with a sense of community. Those seeking
this type of housing are increasingly gravitating toward Coliving
developments in major cities across the world.

Although there are various forms of Coliving, short for “communal

living,” the general definition is a multi-unit residential typology which
houses young, like-minded adults, focused on affordable private living,
coupled with communal spaces and community lifestyle, all within a
hassle-free lease.

Global Coliving Trends

Evolving Asset Class Institutional Investors

US has more than 90 co- Millions of dollars being invested
living companies. in Coliving start- ups in the US.

Increasing demand from US-based Coliving operator

millennial population. start-up, Bungalow, has raised
more than USD 60 million.

Target Workforce Student Demand

Freelancers and entrepreneurs Students are choosing Coliving
are growing worldwide. apartments over traditional
dormitories.
Communal lifestyle environ-
ment is expected to be further
demanded.

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Characteristics of Coliving Trends

Trendy Lifestyle Tech-driven

Community-focused social Mobile application for social
events (e.g.yoga classes and interactions and tenant-operator
movie nights). communication.

Hassle-free & Flexible Millennial Community

Plug-and-play model provides Lock-in lease periods usually
flexibility to tenants. between 2 and 6 months only.

Short-term lease and fully- Demanded by digital nomads,

furnished and serviced units. students and freelancers.

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Key Drivers

Growth of the sharing

economy
An increasing trend towards Coworking and Coliving is
symptomatic of growth in the sharing economy. With the
number of city dwellers on the rise, and a propensity to
cohabit with others, we are seeing a responsiveness in
developers to offer millennials flexible, cost-effective living
spaces with the added benefit of a sense of community.

Experience
Recreation and well-being remain a key priority for today’s
dwellers, and facilities that can offer an experience focused
on health, well-being and leisure will attract and retain
millennials. With arranged activities that create a sense of
community, coliving provides target tenants with the lifestyle
and experience they desire.

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Focus on convenience
In an ever-changing and rapidly moving world, people are
increasingly searching for convenience and will gravitate towards
those products and services which understand this need.

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What Do Occupiers
Look For?

Hassle-free & flexible leases

Today’s highly agile workforce is nomadic by nature, and setting
down roots is not as common as it once was. Short-term leases
and fully furnished and serviced units which require little invest-
ment and maintenance are proving popular.

Affordable & private living

Affordability remains a key factor, alongside privacy. Private living
spaces that provide a welcome retreat are complemented by wel-
coming communal facilities. In today's fast-paced life, this combi-
nation offers residents the opportunity to relax as needed or
engage socially with other community members at their leisure.

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Communal spaces fostering
networking & relationship
building
Networking and communication are staples sought after by today's
young population. Fully functional common spaces with events
encouraging interaction between users are a unique selling points
within new housing developments.

Community lifestyle,
programming & activities
As cities grow, people are looking for more ways they can best
utilise their spare time. With work, leisure and entertainment offer-
ings focused in a close proximity, residents are able to achieve a
much-needed work-life balance.

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Typical Amenities
& Facilities

Furnished Wifi Fitness Center

Retail Garden/ Roof Terrace

Green Area

Games Room BBQ Workspace

Facilities Areas

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Bicycle Storage Social Spaces

Laundry Hireable
Services Event Space

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Key Regional
2. Collective
Projects Emaar's first coliving project,
Collective at Dubai Hills Estates,
aims to foster a sense of commu-
nity for its residents, allowing
them to easily interact and collab-
orate within a unique environ-
ment. The project was well-re-
ceived in the market, with over
400 units sold in one day, under-
scoring the potential for unique,
coliving products in the region.

DUBAI MARINA THE PALM JUMEIRAH

SHEIKH ZAYED ROAD 4

3
2

1. UNA Apartments
1
Once completed, UNA apart-
ments will host like-minded,
creative people looking for a
fulfilling and affordable
lifestyle. The project will offer
960 apartments targeting
millennials and fast-paced
entrepreneurs and providing a
live, work and play environ-
ment.

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 3. Collective 2.0 4. Socio

Collective 2.0 by Emaar was Socio by Emaar is an upcom-

developed off the back of ing “Coliving” concept located
Collective's success. In addition with Dubai Hills Estates’ Park
to providing community living, Heights cluster. It will encom-
the project will be located in pass 2 residential towers with a
close proximity to key demand total of 330 luxury residences.
generators, such as Dubai Hills
Park and Dubai Hills Mall.

BURJ AL ARAB

BURJ KHALIFA
EMIRATES TOWERS

DUBAI INT. AIRPORT

5.
SHEIKH MOHAMMED
BIN ZAYED ROAD KOA Canva

KOA Canvas, recently com-

pleted next to Al Barari, offers
86 apartments that merge old
EMIRATES ROAD
and new designs. The project
offers a wide variety of facilities
and amenities to support urban
lifestyles.

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Conclusion
With continuous change impacting our daily lives, the
built environment is following suit. An increasing
focus on amassing experiences and connecting with
others (whether physically or virtually) is creating a
need for unique physical spaces which promote net-
working and collaboration.

The growing demand for convenience and flexibility is

also pushing real estate developers and operators to
think of new offering and models which promote these
elements and respond to occupiers’ needs. As we move
forward, Coworking and Coliving particularly are two
up-and-coming real estate types which are likely to con-
tinue making waves, inspiring change in other sectors
and shaping the physical world we live in.

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Contacts
For questions regarding the real estate market in the UAE and KSA, please contact:

Nicholas Maclean Mike Young Simon Townsend Michael Heitmann Gabriella De La Torre
Managing Director - Head of Advisory & Head of Strategic Head of Consulting Director,
MENAT Transactions Services Advisory Consulting

Asma Dakkak Yazeed Hijazi Mohamd Alkhatib Rim Ghalayini

Senior Manager, Senior Analyst, Senior Analyst, Analyst,
Consulting Consulting Consulting Consulting

Abu Dhabi Dubai Riyadh Jeddah

CBRE | Middle East Region CBRE | Middle East Region CBRE Advisory Services LLC CBRE Advisory Services LLC
PO Box 53585 PO Box 506961 PO Box 5364 PO Box 10113
United Arab Emirates United Arab Emirates Riyadh 11422 Jeddah 21433
T +971 2 619 7800 T +971 4 437 7200 Kingdom of Saudi Arabia Kingdom of Saudi Arabia
www.cbre.ae www.cbre.ae T +966 11 263 8666 T +966 12 601 7773
www.cbre.sa www.cbre.sa

Manama, Cairo, Casablanca and Istanbul

and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
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