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Demand For Flexible Space In LATAM At “All-Time High”, Up 86% From 2020-2021

New research from The Instant Group reveals that interest in flexible space in Latin America is hitting record levels.

by Cecilia Amador de San José
November 19, 2021
in Business
Reading Time: 3 mins read
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Demand For Flexible Space In LATAM At All-Time High
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  • New research from The Instant Group reveals that interest in flexible space in Latin America is hitting record levels, predicting an increase of 86% in demand by the end of 2021. 
  • Companies in the region are flocking to flexible space as they focus on agility and rightsizing their portfolio for a hybrid future. 
  • However, high demand from large occupiers will, undoubtedly, increase competition in key LATAM markets and desirable space will likely become limited early in 2022. 

The Instant Group recently released the findings of its Latin America Flex Market Review. The report found that the coronavirus pandemic has accelerated interest in flexible workspace solutions across the region to record levels.  

The report, which focused on Mexico City, Lima, Bogota, and Buenos Aires predicts that the flexible workspace industry will experience an increase of 86% in demand by the end of 2021.  

What’s Driving the Growth of Flex Space Demand? 

Latin America lagged in terms of hybrid and remote work practices prior to the pandemic. Because of the pandemic, businesses in the region are now rethinking their approach to real estate, specifically they are prioritizing agility and focusing on rightsizing their portfolio for a hybrid future.  

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Flexible workspaces are now “a key consideration for businesses as they finalize their return to work strategies”.  

According to the Instant Group, demand for flexible office space is being fueled mainly by industries such as consulting, technology, and financial services.  

Implications for the LATAM Market 

High demand from large occupiers will, undoubtedly, increase competition in key LATAM markets. The Instant Group argues that desirable space will become very limited early in 2022.  

Despite an increased appetite for flexible space, businesses are stalling on signing agreements with flexible workspace operators.  

“Although interest for flex space is at an all-time high, occupancy is still a few paces behind, with many businesses stalling signing contracts or occupancy until the new year. The technology industry, large users of flexible space, are delaying their return to office or moving to a remote working model which is impacting occupancy. 

“Delays in vaccination rates and lengthening sales cycles are also contributing to the slow uptake in flexible office space, resulting in operators struggling with large areas of empty spaces.” 

This means, for occupiers, that now is a good time to secure a flexible space solution, as operators are offering attractive rates in a bid to attract clients and quickly fill vacant space.  

This opportunity won’t last long. The gap between high demand and low occupancy is expected to close soon, and when it does “competition for space will be fierce.” 

The scenario will be similar to that of Spain earlier this year.  

“Spain, which was in a similar situation to Latin America 6 months ago, is now reaping the rewards, and operators are reporting low vacancy rates and rising workstation rents. We are already starting to see signs of reactivation of the market in Latin America and as business confidence returns, available space will fill up quickly.” 

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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces. If you'd like Ceci to check out your workspace, feel free to reach out to her at [email protected] (and send a plane ticket).

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