Space as a Service Market by End-user (Small & Medium Enterprises, Freelancers, and Others) and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Space as a Service Market Analysis

The global space as a service market size is predicted to garner a revenue of $11,581.3 million in the 2021–2028 timeframe, growing from $8,437.6 million in 2020, at a CAGR of 4.2%.

Market Synopsis

Increase in the demand for co-working spaces and technology might drive the global space as a service market growth.

However, the lack of privacy and limited knowledge of space as a service among nations might restrain the market growth during the forecast period.

According to the regional analysis of the market, the Asia-Pacific space as a service market share is anticipated to grow at a CAGR of 4.6%, by generating a revenue of $3,201.1 million during the review period.

Space as a Service Market Overview

The real estate industry is experiencing significant structural changes owing to a practice known as space-as-a-service. SPaaS (Space-as-a-Service) is a paradigm shift in commercial real estate's approach to providing services and products to occupants, changing owners from rent collectors to service providers. Coworking, co-living, and even a retail concept called as brandboxing are all examples of the SPaaS business model, in which landlords essentially provide a package of services that enables renters to just use the space. This includes everything from internet connectivity to furniture and fixtures, as well as the people required to run their businesses.

Covid-19 Impact on Space as a Service Market

In March 2020, the World Health Organization declared COVID-19 as a pandemic, which resulted in restrictions on travel and disturbances in financial markets, as well as negatively impacted supply chains and production levels. The coronavirus pandemic has unleashed a series of unprecedented events affecting every industry. Space as a service market experienced a negative impact due to the shutdown of offices and increase of remote work culture. However, in the latter half from the covid-19 era, due to the ease of restrictions, space as a service market experienced a growth. Companies are restarting operations and adapting to the changing normal as they recover from the impact of coronavirus, which resulted in severe containment measures such as contactless working, social distancing, and the shutdown of commercial activity, all of which caused operational challenges. Therefore, it is anticipated that covid-19 has a moderate effect on SPaaS market.

Increase in Technology is Anticipated to Drive the Space as a Service Market Growth

SPaaS is the result of a series of technologically enabled structural developments in the commercial real estate industry. Technology is setting the way for major shifts in how organizations function, how people work and live, and where they do so. The exponential expansion of high-speed internet, ubiquitous usage of smartphones, proliferation of cloud computing & IoT devices, and acceptance of artificial intelligence & robots have all been key accelerators for this revolution. These technologies are reshaping the way we utilize and occupy space as a society and as a workforce.

To know more about global space as a service market trends, get in touch with our analysts here.

Lack of Privacy and Awareness of Space as a Service Might Restrict the Market Growth

If workers don't have their own office, finishing all of their job in a public location might be difficult, especially if they are working with confidential material or sensitive customer data. Competitors in the same building can listen in on team's brainstorming sessions or phone calls due to a lack of soundproofing and excessive use of glass and steal unique ideas. Leaking classified material can result in significant fines or litigation for a company. Moreover, these co-living and co-working spaces are only limited to few cities till date due to lack of awareness. These factors might restrain the growth of the market.

Increased Usage by Large and Small Organizations are Expected to Increase the Opportunities of Space as a Service Market Growth

The space as a service business model is being embraced by both large and small retailers. Fourpost & BrandBox, two PropTech startups, are disrupting the conventional retail concept by adjusting the co-working concept to retail through a concept known as "brandboxing," which allows online retailers to test and scale their products in local malls across the United States on flexible terms and all-inclusive set-ups. This season, Macerich, a self-managed Real Estate Investment Trust, is experimenting with the SPaaS concept in both the West Edmonton Mall and Mall of America.

To know more about global space as a service market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The small & medium enterprises sub-segment is predicted to have a dominating market share in the global market and register a revenue of $5,278.7 million during the forecast period. The benefits of coworking spaces and the ongoing rise of start-ups in developing nations are driving this industry. One of the primary drivers of coworking space market development over the next few years, according to the study, is supporting government initiatives and regulations promoting small-scale firms.

Source: Research Dive Analysis

The Market for Space as a Service in Asia-Pacific to be the Fastest Growing

Asia-Pacific is anticipated to be the fastest growing market during the forecast time period and reach $3,201.1 million by 2028, with a CAGR of 4.6%. The Asia-Pacific region plays a vital role in the real estate industry's future. It is responsible for nearly one-third of the world's population, and it comprises of several of the quickest growing economies. With the increase in the number of small businesses, the demand for space as a service is also gradually increasing in Asia-Pacific region. With the increase in the number of SMEs, combined with the SPaaS benefits, the region is expected to boost the growth of the space as a service market.

Competitive Scenario in the Global Space as a Service Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading space as a service market player are WeWork, 91springboard, Awfis, Common Ground, Innov8, Workbar LLC, Regus, Colive, MindSpace, and Industrious.

Porter’s Five Forces Analysis for the Global Space as a Service Market:

• Bargaining Power of Suppliers: SPaaS market contains average concentration of distributors & suppliers and high buyers. Therefore, the distributors & suppliers’ control is predicted to be reasonable, resulting in moderate bargaining power of dealers.
  Thus, the bargaining power of the suppliers is considered to be moderate.
• Bargaining Power of Buyers: Buyers might have low bargaining power, significantly because of moderate players functioning in the space as a service market.
  Therefore, the bargaining power of the buyer is low.
• Threat of New Entrants: Investment cost and government policies are moderate in this market.
  Therefore, the threat of the new entrants is moderate.
• Threat of Substitutes: There are fewer alternatives for space as a service.
  Thus, the threat of substitutes is low.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense due to the continuous expansion and demand for the space as a service model.
  Therefore, competitive rivalry in the market is high.