The rapid growth of the flexible office sector is set to continue apace in years to come, with flex workspace in EMEA likely to grow by over 50% by 2022 and the number of office workers occupying this space reaching 750,000 across the region, according to new research from Colliers.
'The shift towards ‘space as a service’, and not just a commodity is probably the biggest driver of growth in demand for flexible workplace going forwards. Customer centricity is at the heart of this and is likely to see flexible workplace continue to disrupt the status quo for some time yet,' said Tom Sleigh, Colliers’ head of flexible workspace consulting, occupier services - EMEA.
Colliers' flexible workspace outlook report 2019 finds that the number of flexible workspace operators across Europe has grown by 135% over the last four years, with the number of flexible workplace centres increasing by 205% over the same period.
As the desire from occupiers for flexible office space shows no signs of diminishing, Colliers’ research indicates that take up could double again over the next three years across major European cities.
'This could have a major impact on all EMEA markets, where the flex sector currently accounts on average for 1.5% of the overall office market,' Sleigh added.
'We predict that supply of flexible workspace in the UK capital of London, for example, will continue to significantly increase over the next few years, growing to account for 10% of the market by 2022 – this would mean that some 300,000 office workers could be working in new flexible and dynamic office space in the city within three years.'
Disruptive shift
Colliers’ report highlights how traditional landlords are responding to the market shift, where, particularly in London, some are establishing their own flexible workspace presence as seen with L&G and its Capsule venture, LandSec recently launching Myo and British Land’s Storey offering.
Meanwhile, an increasing number of landlords are looking to share risk and upside through joint venture opportunities with the more established and successful workspace operators, particularly where additional ameneties and community aspects are on the table.
'Despite the low vacancy rates of office supply in London, occupiers are demanding more amenities and flexibility from their workspace which has resulted in a change of strategy from landlords, who have either launched their own flexible workspace brands or entered into JVs with established operators,' said Sleigh.
'This indicates that there could be additional capacity as space is carved out of the existing traditional office market to make way for the continued and growing desire from occupiers for flexibility.
'More choice and a wider variety of flexible workspace options offers increased choice for occupiers and should drive levels of utilisation, in particular from larger corporates who are actively embracing the benefits of flexible workspace.'
Growth curve
Concerns over the ‘excessive growth’ of the flex sector, however, have been well publicised, with occupiers in certain business sectors remaining wary of overexposure to co-working, particularly in light of the prospect of economic cooling and diminishing levels of employment growth.
Damian Harrington, head of EMEA research & forecasting, Colliers International, concluded: 'It is clear to see how rapidly the flexible workplace niche has expanded since 2001 in terms of the number of sites, volume of space (sq m) and number of operators in situ across Europe.
'However, even at the top end of the spectrum, total take-up is marginal in comparison to the wider office market, suggesting the sector has not expanded to excess and there is still room for growth.'
