Global flex office providers optimistic about next 12 months, says survey
In the first of a series of sentiment surveys among flexible office providers across the world, Workthere found that 26 per cent are optimistic about the prospects for the sector over the next three months, while 62 per cent felt the same about the next 12 months.
The flexible office specialist also found that providers in North America are most optimistic followed by Europe and then Asia.
Workthere’s Flexible Office Provider Sentiment Survey collated over 101 responses from a variety of providers in 11 countries across the world to understand their position and plan moving forward, as well as their sentiment on what the short and long term picture looks like for flexible offices.
Other key findings from the survey included the fact that flexible office occupancy before Covid-19 was at an average of 83 per cent globally and is expected to be at 71 per cent by the end of May. Current enquiries for this type of space are at 20 per cent of normal levels globally with Asia seeing a greater proportion of clients not renewing contracts at 27 per cent, compared with 13 per cent in Europe and 12 per cent in North America. However, interestingly, Asia has seen a higher levels of enquiries so far in April at 33 per cent of the normal levels against 16 per cent and 19 per cent in Europe and North America respectively.
Jess Alderson, global research analyst at Workthere, says: “Our flexible office sentiment survey provides a snapshot of the current market conditions in this sector and the associated impacts of COVID-19. It is encouraging to see an optimistic bias for the 12 month outlook and global occupancy levels over 70 per cent. It is also interesting to see the responses from Asia, who are at a different point in the cycle, against those in Europe and North America.”
The survey also showed that 33 per cent of members globally have asked for some form of rent relief, and this number is consistent across all regions. The most common form of relief granted by providers to members being: deferring rent for a month and extending the licence agreements; allowing members to downsize space and a 20-50 per cent rental discount for one month.
Cal Lee, global head of Workthere, says: “The flex market is clearly exposed in the short-term to any market impacts such as what we are witnessing with COVID-19. It is at risk from companies that are not renewing contracts as they go into survival mode and we expect that these figures will rise come the next survey in May as more members seek help putting further pressure on providers.
“For now, team-work is paramount in ensuring the relationship between landlord, operator and customer continues to run smoothly as businesses begin to think about returning to work and what that might look like. Those providers that work with their customers to help them through this time are likely to see a return of loyalty by that customer in the years ahead. The sector is in a good position to bounce back in the short term and looking forward to the longer term prospects, it is set to play a vital role as office occupiers look to the flex market in order to diversify and add resilience to their occupational portfolio.”