Analysis of risk shifts in the co-working environments

Co-working is a raising global trend in office property markets. Sweden is one of these markets experiencing a huge expansion of co-working. Though the share of co-working spaces is still quite small in comparison to the whole property market, the growth dynamics propels real estate actors to develop new business models that in turn raise the necessity for the analysis of risks associated with these models.When office premises are rented in a traditional way, the landlord often requires a bank guarantee from the tenant. The bank guarantee is a risk hedging tool against risks associated with the company growth, profitability, especially in the case of a new establishment like startup companies. The bank guarantee amount normally equals a certain number of monthly rental payments and is used when the company cannot pay the rents. In Sweden, traditional rental contracts for office space vary between three to five years and are signed by the landlord and the tenant, who is the final user of the space rented.In the case of co-working, office premises are often not rented directly to the final user, but rather indirectly through operation companies . Example of such companies are WeWork, United spaces, Workaround, etc, who sign very short rental contracts with the end user of the premise. The rentals based on a short-term contract that is not subject to bank guarantee, often implies greater risk in comparison to longer rental contracts. How do different property market actors like banks, landlord and tenants evaluate these risks? Are there any risk shifts connected to business cycles, type of tenant, industry and other factors? This paper aims to provide answers to these questions.Descriptive approach and interviews with local actors as a main method of analysis is used in this paper. The result of this paper presents the framework of risks shifts in the co-working environment, which contributes to the existing research by providing a deeper understanding of this emerging trend and its implications.