Unicorn Workspaces is a shared office provider based in Berlin that in 2019 opened two new units in Lisbon, offering flexible workspaces in prime locations.
Unicorn Workspaces is a fairly new presence in Portugal, what made you think that Portugal and co-working went together?
Unicorn Workspaces Portugal is a franchise of the homonymous German company and since we observed there was so much unexplored potential in Portugal, we decided to set up shop here and thus expand our footprint. With so many entrepreneurs coming to Portugal, we opened two locations in Lisbon in which we are offering customizable functional workspaces. Every company has its own space depending on the team size and we can accommodate up to 100 desks per company.
Shared workspaces are the future and with so much demand coming in every day, this sector will surely take off spectacularly.
What makes you feel confident that shared workspaces are the future?
It became transparent to us that startups are continually scaling their business, and they increase or decrease their team size, so a traditional lease wouldn't be suitable. In addition, traditional businesses have also started to follow the co-working trend, they like the flexibility and cost cutting that comes with it during these unusual times. Seeing how this idea was gaining more and more traction, we wanted to be the right people in the right place.
What other reasons drew you to Portugal specifically, other than its bustling startup scene, and how does it compare to Germany?
Coming from Germany where the tech talent pool is really sparse, we found Portugal rich in skilled workforce. The market is also well positioned to act as a bridge to Brazil, Angola or Cape Verde, among others appealing destination in Africa and Latin America. It's a migration friendly country, with a stable economy.
The pandemic is the catalyzer that made companies realize how important it is to be situated at a cultural confluence where workforce can be hired from various neighboring countries. Portugal has this magical mix of location and people.
How did the global pandemic affect your business model, given the ease with which tenants can terminate their commitments?
In the context of the pandemic, flexibility was indeed a drawback for us because tenants considered cancelling their lease for the following months, with the situation being so uncertain. However, it was not as bad as we expected and during the most difficult period, we lost around 30% of our occupation rate, while the cashflow was affected by ongoing negotiations. We stayed afloat thanks for a very profitable 2019.
And we adapted! Companies started asking about virtual offices - a product we didn't offer up to that point, and that provides a stable revenue. Many virtual office clients require a physical meeting room, so we added packages that include flexible hours for them, while other just wanted to have the virtual entity in Portugal. The demand has increased again end of 2021, and we became fully occupied like pre-pandemic. So now is the time to think about further expansion.
Is there a visible upward trend now, in terms of office demand in Portugal, and the desire to work in shared spaces?
People are still wary of what the future may bring, but that is not stopping companies flocking to Portugal. There is growing demand for quality offices in Lisbon, particularly for flexible offices, and not enough supply. Clients are acknowledging that if they cancel their lease contracts, they could risk losing their privileged office spaces. So yes, things are on an upward trend, and at Unicorn specifically we have a high rate of occupancy.
What are the main challenges a newcomer should expect to bump into on the Portuguese real estate market?
Headline? Transparency can be an issue. When we entered the market, we were lucky to have support from the state through Invest Lisboa, including recommendations and contacts from lawyers to contractors. However, the legal framework can be otherwise confusing, and this is why it's important to be in constant touch with a local partner. The market is still a bit of a Wild West, and inside connections are vital to be successful.
What are the plans you want to pursue with priority in the next two to three years?
We were very close to opening a third location when the pandemic hit, and while we put that on hold temporarily, expanding is part of our future goals. After Lisbon, we intend to conquer the Porto market since it's on an upward trend. Long term we aim to spread our wings far and wide.
Do you have a final message about Portugal’s property market?
For quite some time Portugal has been overlooked by international players, but nowadays doing business has turned into a borderless activity, especially with the help of digitalization. In conclusion: the right time to act is now because the market is going to get crowded really soon!
