The flexible workspace industry has undergone many iterations over the last several years, but is it finally poised for growth in the post-pandemic world?
Yes and no.
While operators have expanded and landlords dip their toes into the pool, the question isn’t whether flexibility will continue to expand. Rather, it should be asked, “Can money be made?”
Just this week, one of London’s most prestigious landlords, the Howard de Walden Estate, announced it would be opening a boutique coworking space run by operator Spacemade.
This move indicates that a more mature shift is happening within the industry. The days of scrappy, young startups working in cheap close quarters are no longer the rule, but the exception in coworking.
Additionally, the BBC recently announced it would be cutting back on its office footprint as employees pivot to a hybrid work model. This includes leaving its Wogan House office near its headquarters in London.
Another promising sign for the industry is IWG’s recent 25% year-on-year growth reported for the third quarter of 2022. Although the operator has faced a series of ups and downs, including a disappointing stock presence and earnings expected to be on the lower-end of estimates, demand for its services continues to uptick.
London serves as one standout example of how modern workplace trends are impacting the office sector, while giving insight into what to expect moving into the new year. Profitability in the flexible space market could happen, but the economy and state of global affairs could force this growth to slow.