Occupiers can expect to see an increase in location choices and enhanced specification in the flexible office space, predicts Colliers in its latest report, Flexpansion 2021, which analysed 36 EMEA markets.
As occupier demand for flexible workspace continues to grow, more operators are battling for market share, and are adapting their offering with enhanced concepts and higher quality products – which will facilitate more choice and flexibility for occupiers,' said Tom Sleigh, head of flexible workplace consulting, EMEA occupier services, Colliers. 'The development of more products will, in turn, likely deliver better facilities as flexible workspace providers differentiate their facilities to draw in occupiers.'
With many organisations permanently adopting an agile working policy, and some businesses moving away from traditional office space altogether, existing flexible workspace operators have responded by expanding and 43 new operators entering the EMEA market.
Large players do dominate the market, but the new entrants combined with the ongoing rationalisation of space has led to a rebalancing.
Alongside operator expansion, substantial growth has occurred in landlord-driven concepts. 'Across the region, 33 new sites totalling 90,098 sq m have been opened since 2020, with 19 openings last year,' Sleigh added. 'This is partially in response to the pandemic as landlords realised they need to adapt their office offering.
'In the UK, we are witnessing an increase in partnerships between landlords and operators, as investors seek direct exposure to the sector and to elevate the amenities available within their assets.'
TOG, X+Why, Fora and Orega have all announced partnerships in the last 12 months.
Demand from flexible workspace operators to acquire space in central business districts (CBDs) remains strong, but as workforces become more widely distributed as the ‘work from anywhere’ approach is utilised by many organisations, the demand for decentralised flex-space has grown. A combined 256,000 m2 opened across inner and outer city locations, narrowly surpassing the 252,000 m2 opened in CBD locations.
European shares
By market, the greatest decentralisation of flexible office space occurred in Barcelona, Cologne, Warsaw and Munich last year. In contrast London, Amsterdam and Copenhagen further centralised their space offer.
Despite the increase in the number of players in the flexible office space market, new activity remains subdued with only 2.1% of available office stock being flexible.
This low rate can be attributed to ongoing rationalisation by some operators which accounted for 30% of the space closed, while other smaller and typically single location operators ceased operating in 2021.
For example, WeWork’s rationalisation saw closures in Warsaw, Oslo and Madrid, while IWG expanded its ‘Spaces’ brand in Riyadh’s CBD and outside of Warsaw.
The report notes that Immofinanz launched 900 m2 in Warsaw’s city centre at Warsaw Spire, as Ghelamco added 684 m2 in the Polish capital’s CBD at Rondo Daszynskiego 1.
On the occupier side, in the UK, Currys announced it was moving to ‘fully flex’ and signed up to approximately 50 sites across WeWork’s portfolio.
