As Flexible Workspace Centers Grow In Latin America, Workstation Rates Are Down And Vacancy Rates Are Up Due To COVID-19

• According to a new report by the Instant Group, Mexico City is the largest flexible workspace market in Latin America. 
• Over the last decade Latin America has had a 230% growth in flexible workspace supply. 
• Workspace rates, however, have declined over the past two years. 

Mexico City is the largest flexible office market in Latin America, with 11 percent of the market share by number of centers, while Buenos Aires is the most expensive, with a cost-per-desk of $570, according to a new report, The Growth of Agile Workspace: Latin America, by global workspace innovation firm The Instant Group.

Over the last decade Latin America has had a 230 percent growth in supply, compared to the 196 percent growth in the U.S. in the same period. However, market rates have been on the decline for the past two years. In 2019, an increase in supply pushed down workstation rates, and in 2020, Covid-19 resulted in rent cuts as operators try to retain clients and fill vacant space. Currently, rates are at least 20 percent reduced and as much as 70 percent reduced from some operators as part of a long-term engagement strategy to retain clients.

“The past two years have seen a shift in demand. While the coworking and flex market initially focused on startups and occupiers in Latin America, we are now seeing traditional occupiers and corporates choose agile workspace, which is contributing to a surge in demand for larger requirements and customized space,” said Luis Perez, Vice President- Solutions Development LATAM. “Those entering the market today have their pick of location, space and build-out as vacancies are up, though we are also seeing pent-up demand as people have held back making decisions up until now in the pandemic. We also see suburban locales becoming more popular as companies take on a hub-and-spoke strategy in areas where transportation infrastructure is suffering and commute times are exceedingly long.”

City-by-City Snapshot 2019-2020

·      Mexico City: 238 centers with an average monthly workstation rate of $336 and 23 percent market growth. It also has 11 percent of the market share in terms of number of centers and the highest percentage of large operators, at 22 percent. The flex office market is currently about 60 percent occupied, a drop of 15-20 percent since pre-Covid. However, demand levels are higher than they were before the pandemic, with search volumes up 2 percent from this time last year.

·      São Paulo: 170 centers with an average monthly workstation rate of $480 and 11 percent market growth.

·      Bogota: 140 centers with an average monthly workstation rate of $302 and 21 percent market growth.

·      Buenos Aires: 81 centers with an average monthly workstation rate of $570 and 23 percent market growth.

·      Santiago: 80 centers with an average monthly workstation rate of $356 and 10 percent market growth.

·      Monterrey: 77 centers with an average monthly workstation rate of $300 and seven percent market growth.

·      Lima: 66 centers with an average monthly workstation rate of $337 and 18 percent market growth. Inquiry levels in Lima were up 64 percent in the first half of 2020 compared to the first half of 2019.

·      San José: 25 centers with an average monthly workstation rate of $327 and 19 percent market growth.

The full report may be found here.

About The Instant Group

The Instant Group is a workspace innovation company that rethinks workspace on behalf of its clients, placing nearly 8,000 companies a year in flexible workspace such as serviced, managed or co-working offices. Its listings’ platform www.instantoffices.com hosts more than 14,000 flexible workspace centers across the world and is the only site of its kind to represent the global market, providing a service to FTSE 100, Fortune 500, and SME clients. http://www.theinstantgroup.com