Europe’s Rising Stars of Flexible Workspace

The UK may have experienced the lion’s share of attention over the past few months due to its high-profile EU Referendum. Yet while Britain mulls its ‘Brexit‘ future, there are plenty of European countries enjoying the flexible workspace limelight.

Recent figures provided by Ben Munn, Managing Director of Consultancy Services at Instant, show significant strength within the European flexible office market.

According to Munn’s research ‘Shifting Sands: The Rise of Flexible Workspace’, the EMEA region (Europe, Middle East and Africa) holds approximately 21% of the global flexible workspace market. This figure doesn’t include the UK, which controls 29% and is second only to the US and Canada with 31%.

Instant’s research suggests that EMEA and UK combined contribute to more than half (52%) of the world’s total flexible workspace footprint. The leading lights of Europe’s industry include Germany and France, which have both shown considerable growth over the past year:

• Germany grew by 9% in 2015 and currently operates 536 business centres, largely dominated by Regus, Sirius and Ecos Office. Berlin has 113 centres, a figure which has grown 16% year on year.
• France experienced 8% growth in 2015 and has 567 centres. In addition to Regus, the major players are Buro Club and Multiburo. Paris is home to 134 centres, a figure that grew by 11% compared to 12 months previously.

These figures reflect both traditional serviced office centres as well as coworking spaces. Yet given the rocketing pace of new locations and WeWork’s rapid European expansion, these figures have no doubt swelled since the report’s publication.

As for the elephant in the room, will EU cities attract more flexible workspace interest in light of the UK’s decision to leave the EU?

There is expectation from some corners of the commercial property industry that the UK will falter as corporates look to shift their headquarters to EU cities like Berlin and Paris. While this remains to be seen, the UK flexible workspace sector is well-placed to aid business owners during this period of transition, and may even benefit from it.

Notes from the UK Business Centre Association’s July 2016 board meeting found that operators are “predominantly confident in the sector’s ability not just to ride the European political rollercoaster, but to capitalise on it”:

“It [Brexit] has presented some challenges for operators over the past few months, including a slight drop in demand in some locations and slower decision-making processes. However, it is largely expected that any dips in demand will spring back, mainly due to the fact that our industry offers a flexible service that is invaluable to business owners, particularly during times of transition. Indeed the flexibility and value of our sector appears to be shining through, placing our industry in a good position for the second half of the year.”

Away from ‘Brexit’, many EU countries have been investing in economic growth and nurturing small business innovation, which is at least partly evident by developments in their flexible workspace and property markets.

CBRE‘s Central Eastern Europe Real Estate Market Outlook 2016 delivers key findings for the real estate market in Central and Eastern Europe, including Hungary, the Czech Republic, Romania and Poland. The summary notes:

• Economic growth is the norm for almost all CEE countries, at a speed above that of Western Europe countries.
• The dominant cyclical factor is consumer spending, which is currently benefiting from a host of positive factors.
• Historical high office demand is registered in almost all CEE countries, driven mostly by IT and outsourcing international occupiers.

The report notes that Hungary “has grown under the radar for the past 12 – 18 months” at a rate that is well past the region’s average, and has become CBRE’s “go-to-destination in 2016”.

Indeed, the flexible workspace market in Central and Eastern Europe may well continue to prosper over the coming year as innovative operators like DBH and Sterling Offices – which between them operate leading flexible workspaces in Hungary, Romania, Turkey and Bulgaria – further strengthen and expand their services.

So while Germany and France might currently be leading the EMEA market, there is plenty of room under the flexible workspace spotlight to accommodate more rising European stars.