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The rise in popularity of coworking spaces is a reflection of the growing number of benefits they offer, especially when compared to leasing exclusive premises for a fixed period. Coworking spaces are membership-based workplaces where workers, usually not employed by the same organisation, work together in the same area. Coworking spaces vary in terms of the memberships they offer, the types of businesses they attract and the facilities they provide. In this article, we present six reasons why licensing in a coworking space may be better than renting elsewhere.

1. Flexibility

Coworking spaces undoubtedly offer more flexibility than traditional leases. One of the critical features of a lease is that it is fixed term. The fixed term provides certainty to the landlord as it guarantees a rental income for a set amount of time. Similarly, it gives assurance to business owners, ensuring that they can continue to operate in the same location for a fixed period. This certainty allows for business planning and peace of mind.

Coworking spaces, on the other hand, are popular due to their flexibility. Coworking spaces typically involve licence agreements which do not provide exclusive possession and generally are for a shorter period.  For startups, it is often difficult to predict the growth potential of your business and where you will be in a few years.

A coworking space means that you can find a space for a small number of people for a short period and only pay for the area you use. As you grow, you may be able to:

  • access more desks in the same coworking space; or
  • relocate without the trouble of breaking a lease or finding someone to replace you.

2. Licence Agreement

Most coworking spaces will enter into a licence agreement with their members. This agreement sets out the terms of the relationship and usually accompany the coworking space rules. A licence does not grant you exclusive possession of premises, but it does let you share the space and use the facilities.

The benefit of the licence agreement is that it usually offers members various packages, depending on their needs. This freedom allows you to build what you require into the arrangement, which you otherwise would not be able to do in a lease. You should read through the coworking space licence agreement carefully, paying particular attention to:

  • the fees;
  • the permitted use;
  • how you can terminate the agreement; and
  • specific rules you will need to follow.

3. Culture

Licensing in a coworking space means that you will be surrounded by other exciting and diverse businesses. It is an excellent opportunity to network and collaborate with professionals in your field, as well as those from a broader demographic.

Many coworking spaces cater to specific areas of interest. Some will feature many early-stage startups, while others will be even more niche, for example only targeting fintech startups. This proximity will surround you with potential partners, clients and mentors, which is invaluable as your business grows.

Coworking spaces also offer a social scene. For many people who work alone, remotely or in a small business, this can be quite enticing. There are a growing number of coworking spaces that make use of underutilised spaces during the day.

For example, TwoSpace has partnered with restaurants to offer members a working space with good facilities in the day. By night, these venues return to their original use and see members socialising and making connections.


Other coworking spaces offer things that encourage professional development and networking, including:

  • events;
  • speakers; and
  • hackathons.

4. Location

Many coworking spaces are in central places in the heart of cities like Sydney or Melbourne. Typically renting premises in these locations is very competitive and expensive.

Coworking spaces offer a cheaper alternative that still allows you to be in a great place. A good location is vital as it will enable you to be central to clients and potential investors. By being close to other businesses and service providers, you will also save in travel costs and time.

5. Cost

Coworking spaces are great for startups and new businesses because you do not need to pay the costs associated with renting out your own space. Coworking spaces generally come equipped with office equipment such as printers, kitchenware and furniture. Ultimately, this means you have access to good quality working equipment that you may not otherwise had.

Further, sharing the space means it is cheaper than renting, as you only need to pay for the area you will use. This helps startups allocate more time and funds into establishing their business, rather than on developing a proper office space.

6. Facilities

Coworking spaces are often quite established premises, designed to meet the needs of business owners. Subsequently, there are usually facilities available for your use, including:

  • meeting rooms;
  • conference call facilities;
  • internet;
  • a serviced front desk; and
  • social spaces.

For a small startup, these are facilities you would not usually be able to access if you rented your own space. It means that you can offer your clients and employees an experience that you would not otherwise have access to.

Key Takeaways

Coworking spaces are shared workplaces that bring a diverse range of individuals and businesses together to utilise the one area. They break free from the traditional mould of fixed-term leases by allowing workers to share a space for a flexible period with access to joint facilities. They not only offer a cost-effective solution to startups looking to work in a good location, but they also provide the social and professional benefits of working with other businesses.

If you have any questions, contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.


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