London, October 1, 2020 – European markets with low levels of the existing flexible workspace have seen the greatest growth in new flex operations over the first half of 2020, according to the latest flexible workspace report by global real estate advisor Colliers International.
The Flex Forward report highlights how markets such as Hamburg, Vienna, Moscow and St. Petersburg saw relatively strong flexible workspace take-up levels during the first half of 2020, accounting for up to 30 percent of total office take-up. Although there were some notable cancellations in commitments, 162,000 sqm of new flexible workspace opened bringing the flexible share of modern office space to just under two percent, on average in the region. While the volume of flexible office expansion has slowed, there has been a 1.6 percent expansion in the first half of 2020.
Throughout the last five years, the supply of flexible workspace in the region has accelerated three-fold. Although WeWork and IWG are significant players in the market, their dominance is being challenged by the growing number of multi-market and multi-site operators and owner-operators. There are more than 1,300 operators providing workspace in more than 3,300 locations across the 42 markets surveyed in the report.
Istvan Toth, Associate Director and Data Scientist for EMEA Research at Collier's said: “We’ve noticed two key trends during this period, demonstrating the ability of the sector to react to significant changes in circumstance. Firstly, operators who are able to provide private work environments to their clients have been transacting well, whereas those providing pure co-working space struggled to provide the reassurance of COVID-secure working space for occupiers.
“Secondly, we have seen a shift in the demand for flexible space move away from the city centre to inner and outer city locations, pointing to early stages of decentralisation as cities face density and commuting disruption.”
Take up data for H1 2020 has shown an increase in flexible workspace demand for inner-city locations to 52 percent compared to only 38 percent in 2018-19. Likewise, demand increased for suburban areas to 16 per cent, compared to 12 per cent in previous years.
The Flex Forward report also examined the various options for occupiers and landlords looking to utilise flexible workspace within their portfolios, setting out the various options available.