While many Japanese coworking spaces are expanding and reporting rising revenues, others face economic challenges and rather stagnating membership numbers. The differences between small and large spaces, as well as between metropolitan and smaller cities, are particularly striking.
::: The extensive analysis for this report was made possible by Salto Systems. You can download the full report for free here. Special thanks also go to JCCO & the official partners of the Coworking Trends Survey, who supported the distribution of the questionnaire. We would also like to thank everyone who took the survey! :::
Current Economic Situation and Business Models
More than half of space operators assess their financial situation as good. However, about one in five reports economic difficulties. The group in between considers their situation satisfactory. Compared to international figures, the numbers are similar, with a slight economic advantage for spaces outside Japan.
Over the past twelve months, 42% of Japanese coworking space operators achieved significant profits—considerably fewer than the global average. However, a larger number report at least breaking even.
Most Japanese coworking spaces operate as for-profit businesses, but a higher proportion of operators run non-profits or receive government funding.
This might explain why they more frequently aim to create a positive social impact beyond their space—prioritizing societal benefits over private profits. For that reason, covering costs seems to be a sufficient business model for these coworking spaces more frequently.
Coworking Spaces in Japan Perform Better in Major Cities and with Bigger Spaces
As in many other countries, financial success and profitability depend strongly on location and size.
Larger coworking spaces in Japan’s major cities with over 1 million inhabitants are more likely to report a strong business outlook, with an average occupancy rate of around 70%, and most operate profitably.
In contrast, smaller spaces and those in less urban areas struggle. They more often face financial constraints, weaker demand, and difficulties in building an engaged community.
Despite these differences, the Japanese industry remains optimistic
Around 60% of operators expect a positive development in the coming months. Internationally, this figure is even higher. However, Japan’s more cautious forecast may be culturally influenced, as modesty plays a significant role in business communication.
Key Challenges for Japanese Coworking Spaces
Regardless of location or size, three key challenges shape the reality for Japanese coworking spaces. The most significant is member acquisition—a universal challenge, as it is central to most coworking business models.
However, Japan stands out in two additional areas: space operators struggle more often to find qualified staff and need to explain the coworking concept to potential users more frequently. This is particularly noticeable in smaller cities, but even operators in major metropolitan areas surprisingly cite it as a common challenge.
Other location-based differences align with global trends. Outside major urban centers, demand for coworking spaces is lower, and operators find it harder to build a stable community that ensures long-term member retention.
What Types of Workspaces Are in Demand in Japan?
Currently, flexible hot desks and meeting spaces are in high demand in Japan’s urban areas, while event spaces are particularly sought after in more rural regions. However, Japan defines urban and rural areas differently than many other countries. Due to high building density, even highly developed areas can still be classified as rural if buildings have only two or three stories instead of ten or more.
Next page: What revenue do Japanese coworking spaces generate & do they look different?
