Global business centre market set to hit $64 billion by 2030
The trends, statistics, and prospects
The global business centre market is not just evolving rapidly but leading change. Driven by the increasing demand for flexible office space, the rise of remote working, and the globalisation of business operations, business centres are proving their adaptability.
They offer fully equipped office spaces and professional services, making them essential for companies looking to scale, reduce overhead costs, and maintain a presence in strategic locations worldwide.
Market size and growth
As of 2023, the global business centre market was valued at $32.6 billion. However, the market is not stagnant. It is projected to grow at a CAGR of 9.4% from 2024 to 2030, reaching an estimated value of $64.8 billion by the end of the forecast period. This promising growth trajectory presents many opportunities for businesses and investors in the coming years, instilling optimism about the market’s future.
This robust growth can be attributed to the increasing preference for flexible working space, especially among startups, SMEs, and multinational corporations.
The business centre market can be segmented based on type, end-user, and geography:
By type
Serviced offices: Account for the largest market share, valued at around $15.2 billion in 2023. These offices offer fully furnished space with flexible lease terms, making them popular among companies seeking short-term leases.
Coworking space: Valued at $9.8 billion in 2023, coworking spaces are gaining traction, particularly among freelancers, startups, and remote workers. This segment is expected to grow at a CAGR of 11.2% from 2024 to 2030.
Virtual offices: With a market value of $4.7 billion in 2023, virtual offices provide businesses with professional addresses and communication services without needing physical office space.
By end-user
IT and telecommunications: This sector dominates the market, contributing over 35% of the revenue in 2023. It is driven by the tech industry’s rapid expansion and its need for flexible office solutions.
Banking, Financial Services, and Insurance (BFSI): Holding a market share of around 20%, the BFSI sector is a significant user of business centre services.
Others: The legal services, consulting, and creative industries comprise 45% of the market.
By geography
North America: The most prominent regional market, valued at $12.3 billion in 2023, is expected to grow steadily due to the high concentration of multinational corporations and a mature coworking culture.
Europe: With a market size of $9.1 billion, Europe is the second-largest market, led by critical cities like London, Paris, and Berlin.
Asia-Pacific: This region is experiencing the fastest growth, with a CAGR of 12.1%, driven by rapid urbanisation and the booming startup ecosystem in countries like China, India, and Singapore.
Rest of the world: This segment, which includes Latin America, the Middle East, and Africa, is valued at $4.2 billion and is expected to witness moderate growth.
Trends shaping the market
- Rise of hybrid work models: The Covid-19 pandemic has accelerated the adoption of hybrid work models, where employees split their time between home and office. This shift has led to a surge in demand for business centres offering flexible lease terms and customisable office spaces.
- Technological advancements: Integrating technologies such as IoT, AI, and innovative office solutions is becoming increasingly common in business centres. These technologies enhance operational efficiency, improve user experience, and provide data-driven insights for better space management.
- Sustainability focus: With growing awareness of environmental issues, there is a rising demand for eco-friendly business centres. Many operators now focus on sustainable practices, such as energy-efficient buildings, waste reduction, and renewable energy sources.
- Globalisation of SMEs and startups: As small and medium-sized enterprises (SMEs) and startups expand internationally, they prefer business centres for their cost-effectiveness and strategic locations. This trend is particularly prominent in emerging markets where local companies are looking to tap into global opportunities.
Competitive landscape
The global business centre market is highly competitive, with several key players dominating the industry:
- IWG plc (Regus): One of the largest operators, with over 3,300 locations worldwide. IWG reported a revenue of $3.1 billion in 2023, capturing a significant market share.
- WeWork: Despite its financial challenges, WeWork remains a significant player, with a market share of around 15%. The company reported revenue of $2.8 billion in 2023.
- Spaces: A subsidiary of IWG, Spaces is known for its coworking and collaborative spaces. The brand has been expanding rapidly, particularly in Europe and Asia-Pacific.
- Servcorp: An Australia-based company, Servcorp operates in 23 countries and focuses on providing premium serviced offices and virtual office solutions. It generated $323 million in revenue in 2023.
Challenges and opportunities
While the business centre market presents numerous growth opportunities, it also faces several challenges:
- Market saturation in developed regions: In mature markets like North America and Europe, the high concentration of business centres leads to increased competition and downward pressure on prices.
- Economic uncertainty: Global economic fluctuations and geopolitical tensions can impact demand for business centres, particularly in volatile markets.
- Opportunities in emerging markets: The Asia-Pacific region, Latin America, and Africa offer significant growth potential due to the rising number of SMEs and increasing urbanisation.
Conclusion
The global business centre market is experiencing sustained growth, driven by the demand for flexible working solutions, technological advancements, and the globalisation of business operations.
As companies adapt to the evolving work environment, business centres will become even more critical in providing the necessary infrastructure and services to support this transition.
Featured image: The global business centre market is projected to grow at a CAGR of 9.4% from 2024 to 2030. Credit: Tima Miroshnichenko
