- A survey by office agent Workthere found that 62% of operators are optimistic about the next 12 months.
- However, only 26% of flexible office operators feel optimistic about the next 3 months.
- According to Workthere, the sector is in a good position to bounce back and will help businesses diversify and add resilience to their portfolios.
In the first of a series of sentiment surveys among flexible office providers across the world, Workthere found that 26% are optimistic about the prospects for the sector over the next three months, while 62% 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% globally and is expected to be at 71% by the end of May.
Current enquiries for this type of space are at 20% of normal levels globally with Asia seeing a greater proportion of clients not renewing contracts at 27%, compared with 13% in Europe and 12% in North America. However, interestingly, Asia has seen a higher levels of enquiries so far in April at 33% of the normal levels against 16% and 19% in Europe and North America respectively.
Jess Alderson, global research analyst at Workthere, comments: “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%. 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% 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% 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.”
Workthere’s analysis is based on 101 flexible offices around the world, located across Canada, France, Germany, Hong Kong, Ireland, Singapore, Spain, The Netherlands, The United Kingdom, The United States and Vietnam.
Data was collected during the period of 14th April 2020 until 20th April 2020.