While there is uncertainty looming over the flexible workspace industry, it is clear that it is no fad and has permanently changed the office sector.
The coworking revolution has changed how we work and communicate, but the negative publicity from WeWork’s failed initial public offering has put a damper on the once prospective industry.
Despite this, investors predict that coworking or flexible space will take up 10 to 20% of total office stock by 2030, compared to the 2% today.
“It’s important to understand your customer and grow along with them, to offer your customer what they really want,” said Rogier Quirijns, manager of the European Real Estate fund at Cohen & Steers.
Now, the industry is expected to continue evolving through a change in business models. For example, IWG, the world’s largest serviced office provider, has started offering a franchise opportunity for its Regus and Spaces brands in Hong Kong and Japan.
Furthermore, coworking spaces are no longer geared to just freelancers and entrepreneurs. Instead, several corporations with strong credit ratings have become a huge portion of the flexible workspace audience.
Still, the industry has yet to be put to the test of a recession, which could occur in the very near future. The short-term nature of coworking allows tenants to end their leases in a moment’s notice, so this could leave operators unable to make payments.
Regardless, the offerings seen in these spaces will continue to rise in demand and permanently shift how offices operate in the future.