Phone enquiries - please quote property ID 20597
*Expression of interest*
A unique opportunity to capitalise on the fastest growing sector in commercial real estate, the coworking & serviced office industry.
The business has been expertly managed by a small family team who are looking to pursue other projects, leaving the business in the capable hands of a new owner who is keen to ride the growing wave of businesses seeking out more cost-effective and flexible office space in 2019.
The business has a gross revenue of $1.85m (in 2018) and a forecast of $2.85m (in 2019) due to expansions early in the financial year, resulting in an (adjusted) EBITDA of $786,000 p.a. The majority of clients are contracted to 12-month terms with a month in advance direct debit billing resulting in stable and predictable cash flow. The prospective purchaser can request hand over as a low touch business with good returns or a high touch business with outstanding returns.
The industry will see continued success in 2019, with Sydney entering a period of historic low vacancy period (3.6%), high national job growth, minimal to no regulation and the flexibility to support small businesses in expansion and large businesses in consolidation.
What Makes Coworking a Great Business Investment?
Co-Working has become one of the most attractive business opportunities in the past 3 years due to the following:
- Clients are high value and long-term, with the majority under 12 month agreements.
- Coworking is one of Australia's highest growing industries, with a full 1 third of all inquiries generated throughout Australia originating from Sydney.
- The makeup of complementary business promotes a high retention rate as companies utilise each other's services, becoming reliant on the network of the space.
- Companies of 1-12 benefit from increased exposure to a larger culture, the flexibility of leasing desks in line with organic growth and premium office services that would be out of their price range.
- Companies of 12-40 benefit from flexible lease terms, the use of shared services that reduce overheads and the offering of premium services and amenities that increase staff retention in a competitive job market.
Business Insights
- The business is underpinned with a 10 year lease agreements (8 years remaining) with outstanding rents well below market value
- Low debt levels with the majority of growth completed with cash on hand
- No specific education required, this is a simple business to run as legal, accounting, sales and marketing processes are systemized and automated.
- Highly suited to an owner who enjoys being a part of a thriving business network and offering great service and hospitality
- Low market saturation, unlike hospitality, Gyms and health and wellness businesses.
- Minimal to no industry regulation as seen in childcare.
To Apply:
The owners are accepting expressions of interest between now until Friday 1st February 2019, interested parties will be vetted and sent a brief of the performance of the business and will be invited to do further due diligence from February 2019 onwards, with the view to find a new business owner that is the best fit.
The vendor is realistic and will negotiate price and terms to serious buyers.
Any business broker, or individual who can refer suitable clients, owners will be happy to pay a 1% commission on the final purchase price for the introduction.
Supplementary reading for industry insights (Google search the terms below)
- Allwork.space
- Culture clash: flexible workspace, coworking & the future (Knight Frank)
- The Australian Coworking Market report (Office Hub)
- Coworking and flexible office space (Cushman & Wakefield)
- The flexible workplace outlook report 2018 (Colliers International)
- The 2018 state of coworking spaces (Deskmag)
- The lungs of our buildings, why coworking will only get more popular
