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Flex Office Providers’ Optimism Returns In October, Though Short-Term Concerns Remain

by Allwork.Space - Press
November 16, 2020
in Press
Reading Time: 4 mins read
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Workthere’s fourth Global Flexible Office Provider Sentiment Survey results show increased confidence in the sector among North American providers over the next twelve months.

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  • Workthere’s fourth Global Flexible Office Provider Sentiment Survey results show increased confidence in the sector among North American providers over the next twelve months. 
  • The increase in optimism likely results from a decrease in the percentage of members seeking rent relief. 
  • Globally, 42% of flex office providers were optimistic toward the sector for the next three months, a slight increase from the 40% that reported a positive sentiment in the July survey.

NEW YORK (November 13, 2020) – The fourth Global Flexible Office Sentiment Survey by Workthere, Savills’ dedicated flexible office advisory service, revealed an uptick in positive sentiment for the flexible office sector among providers in North America over the next twelve months. While members still expressed some uncertainty about the state of the market in the shorter term, the increase in optimism likely results from a decrease in the percentage of members seeking rent relief (down to 29% from 39% in July) as well as a decrease in the percentage of members not renewing contracts (21%, down from 28% in July). 

“What we’re seeing as we progress through this pandemic period is that market participants are behaving rationally in the face of uncertainty,” said Workthere Americas National Director Ted Skirbunt. “Many small to mid-sized tenants are not renewing traditional leases upon expiration, seeking more flexible solutions, and there are more opportunities out there to secure flexible space at deep discounts to even just a few months ago.  ”

Data indicated that, globally, 42% of flex office providers were optimistic toward the sector for the next three months, a slight increase from the 40% that reported a positive sentiment in the July survey. The long-term outlook was significantly more positive, with 76% of respondents reporting optimism about the flex market over the next 12 months.

The survey also revealed that contract occupancy in the flexible office sector in North America is expected to be at an average of 55% at the end of November, compared to 80% before the pandemic. In a continuing positive trend, monthly inquiries for space across the region increased again to 43% of normal levels compared to 37% in July and just 13% in May. Globally, providers expect contract occupancy to reach 65% at the end of November, and inquiries are at 54% of pre-COVID-19 levels.

Cal Lee, global head of Workthere, comments: “Whilst we have seen a dip in contract occupancy expectations, actual building occupancy and enquiry levels are moving in the right direction and we have seen both steadily increasing since we started our provider sentiment survey in April this year. If these figures continue on the same trajectory, it should result in the market bottoming out, allowing a recovery to begin in the sector. We have talked a lot about the potential of the flexible office moving forward, in particular its ability to capitalise on firms looking to diversify their office portfolio and incorporate more flexibility into their lease terms, we anticipate that this will start to filter through as the market begins to adapt.”

Flex office members seeking rent relief dropped to 22% globally, down from 27% in the previous survey. This figure stands at 29% in North America, down from 39% in July.

About Savills Inc.

Savills helps organizations find the right solutions that ensure employee success. Sharply skilled and fiercely dedicated, the firm’s integrated teams of consultants and brokers are experts in better real estate. With services in tenant representation, workforce and incentives strategy, workplace strategy and occupant experience, project management, and capital markets, Savills has elevated the potential of workplaces around the corner, and around the world, for 160 years and counting.

For more information, please visit Savills.us and follow us on LinkedIn, Twitter, Instagram and Facebook.

About Workthere

Launched in February 2017, Workthere is a Savills venture introduced to help businesses find flexible, coworking and serviced office space across Europe, North America and Asia. Workthere is an entirely new brokerage service and website listing platform – workthere.com – combining tech with an expert human touch. Workthere is a completely free service for occupiers and covers the entire flexible workspace market as well as covering more specialist space such as laboratories. The concept was formed by Cal Lee, a former graduate and development surveyor at Savills, who saw the opportunity to offer a new platform for growing coworking and flexible workspace providers to market their space. www.workthere.com.

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