Juanjo Martínez, CEO de Networkia Business Center
CustomSuits is the result of the business alliance of two great connoisseurs of the flexible spaces sector: Javier Reina, CEO of Reina’s Capital and director of Business World Alicante, and Juanjo Martínez, CEO of Networkia Business Center, a company that has three buildings in Madrid and two in Barcelona. With 15 years of experience in this field, Martínez does not hesitate to describe the current moment as “hatching.” The future of the sector has already arrived.
– Your company was established on March 12 of this year. How was your start up?
- The truth is that the answer is being fantastic. In just a few months, the first customers have already emerged and we already have a top-level partner. In any case, we had no doubt. Both Javier Reina and I know the business center sector well. In my case, I’ve been dedicating myself to them for 15 years. I have experienced the evolution that has experienced since its origins and the truth is that in recent years the hatching has been tremendous.
– In what sense?
- The sector in Spain, until three or four years ago, was testimonial. Only 0.5 of the tertiary meters of the main cities – Madrid and Barcelona – were coworking spaces. However, in three years the figure has multiplied by three, which shows its growth rate. Just a year ago, American renting agencies that qualify real estate portfolios penalized coworking exposure. Instead today they do the opposite. Your portfolio has a better valuation if in your tertiary composition you have a percentage of coworking. Currently, if you own a building and do not incorporate this type of offer, you are not able to meet the demand of a significant and growing percentage of customers. You are missing out.
– It is, therefore, a clear business opportunity…
- It is. In Madrid and Barcelona we are now about 2.2% of the tertiary and all the big consultants are talking about that it could reach up to 30% in 2030. The growth forecasts are very large. But not only in the big capitals. Since 2017, in the US and in the United Kingdom growth has multiplied in cities that are not the main economic axes of the country but are relevant cities. And that phenomenon has been occurring in Spain since 2018. Right now, Valencia, Alicante or Malaga, for example, are very powerful in terms of providing this type of service and growing demand. If the customer’s demand is being so powerful and there are few buildings prepared to absorb it, there is a very clear business opportunity in this market. From that reflection CustomSuits was born.
– What kind of services do you offer?
- Our main client are equity companies that own office buildings. I would like to highlight that the real estate remains the property. What we propose is that they hire us to convert them. Our company manages it in outsourcing and returns the keys with a profitability.
– With an eye on the short or medium term, which cities would be priority?
- We have no limits. But start focus. And that focus has been placed in those cities where we have an important presence, that is, the triangle formed by Comunitat Valenciana, Barcelona and Madrid, which is where we already are and where we know well the terrain we are walking on. In Barcelona we already have a new client – in addition to the two of Networkia-. Elche, Benidorm and Valencia are also three places where we are focusing our attention because there are appropriate buildings and there is demand. To date we have analyzed nine. Keep in mind that not everyone is likely to become a coworking space. As Networkia, to put a reference, we will have studied from our beginnings more than 200 projects and, of them, I only stayed with five. They have to meet a series of requirements, among them, the location and structure of the property are the elements that most mark its viability.
– What annual turnover can one of these buildings get?
- In standard numbers, a project that has an area of about 3,000 square meters, the second year of operation can reach around 1.5 million euros per year of turnover. It is true that you have to make an investment to adapt the building to the concept of flexible space and we have calculated that investment at about 300 euros per square meter. In other words, an owner who has a 3,000-meter building invests one million euros and after two years he already bills 1.5 million. It is a double digit profitability business that gives you recurring income once you have launched it.
– When was the turning point that led to the growth of this sector?
- Our sector is being made great by millennials. Neither they want nor will they want to work as we do who are older. And that has no going back. Today millennials are already almost 50% of the active population and in 2025 they and the ‘Z generation’ will reach 60% of the active population.
– The new needs for flexible work spaces are, in fact, largely linked to the new professions that are emerging in this era of digitalization…
- So is. And the current generations, which are now at the spearhead, are the generations of “co”: sharing, co-working, living together. In addition, in the 21st century we are in the era of “use”. Now we don’t have, we use. We don’t want to have offices, new generations want to use offices. And what we do with flexible space managers is that they are attractive to these new generations who want to use – and not have – these spaces. What in the twentieth century was a product, in the twenty-first is a service.
– The growth has taken place in such a short time that I don’t know if there are enough professionals in the sector to be able to respond adequately to the demand of these spaces…
- The truth is that the growth of the sector is still very powerful but trained personnel, who have the knowledge and experience, there is not much. In fact, the main difficulty for the growth of the sectorIt is knowledge. We are in a time when a lot of money is coming in, the main investment funds are betting on the sector. What is most lacking is not money. It is knowledge. Or there is a Real Estate Real Estate professional or service professionals. There is no complete professional who knows how to manage a real estate asset and at the same time generate and provide the service that this type of space requires.
– The Consell (with Digital District), the City Council and the Provincial Council are paddling in the same direction to turn Alicante into the headquarters of technology companies. They even talk about changing the current economic model.
- There is no other way. Me, who is a Alicante who has been in a city like Barcelona for more than 20 years that has already worked a lot in this line of smart cities, what I am seeing is that the institutions have taken the right path. Spain, in general, has a pending subject such as public-private collaboration at the Administration, company and university level. Those three legs together are very powerful. If we look at our surroundings, the societies that house the most advanced companies are those where companies are born from universities. This is the case, for example, in Silicon Valley and Stanford University. USA It is well ahead of many other countries in this regard and it is because there has always been a close collaboration between public and private initiative that goes in the DNA of each other. And that is a key to success.
– Do you see an interesting coexistence with the spaces offered by the Generalitat for DD, with the science parks and industrial areas?
- What characterizes us is that we provide a high quality 24-hour service. Our level is of excellence, fully oriented to the full comfort of the client. And given the real demand of Alicante, CustomSuits will enable private buildings that can cover it.
– Is there any reference in the world linked to this business concept of flexible work spaces?
It is a globalized phenomenon whose origin is linked to the big cities regardless of the country where they are located. In fact, its growth in Asia and South America is just as powerful as what Europe or North America may be experiencing. In U.S.A. There are initiatives that began more than fifty years ago that can already be considered coworking, so we could say that North America is the precursor country. But in Spain the first center was put into operation in Madrid 40 years ago. Today, the number one city worldwide in this regard is London, followed by New York and San Francisco. In addition, as regards the European continent, Berlin, Amsterdam, Madrid and Barcelona would stand out. They are cities with a very powerful presence.
By: Economía 3
Text: Lola Torrent
Image: Joaquín P. Reina