Japanese flexible office operator TKP Corporation is preparing to take advantage of the opportunity that high vacancy rates could provide.
While the company’s revenue has dropped over the past several months, the company’s current shares have jumped 165% from March as investors anticipate a rebound.
“The pandemic has brought the need for such spaces all at once,” said Takateru Kawano, founder and CEO of TKP. “Many companies will begin to shrink their office space, and in turn will look to decentralize and disperse employees to satellite offices.”
Many major companies in Japan, such as Toshiba and Fujitsu, are already looking into cutting down on their office space. With Tokyo’s office vacancy at its highest point since January 2018, analysts believe that it could continue climbing over the next five years.
Despite these losses, TKP is confident that reconfiguring its spaces to accommodate the new normal will help make up for the stall in revenue over the last several months.
By repurposing its conference rooms into smaller offices, shared office operators can better meet the needs of the hybrid work arrangement that several companies, particularly corporates, have started adopting.
This growth is expected to occur over the next two to three years, where Kawano expects half of current corporate five-year office leases to expire.
“That’s when the change really takes place,” said Kawano. “They will shrink offices, cut office floor and rent satellite offices. That’s when we can attract clients with our added value.”