The flexible office space sector is set for significant growth over the next two years, with European providers actively pursuing new expansion strategies despite rising operational costs.
Data from Instant Group’s “2024 Global Partner Survey Report” shows operators worldwide are remaining optimistic about flexible work environments and their role in the future of work.
The survey reveals 79% of flexible office operators globally plan to expand, with many targeting up to five new locations within the next two years. This trend highlights the increasing confidence in the flex space model — which offers adaptable, short-term leasing options that appeal to many businesses in the post-pandemic economy.
Leading this expansion trend are operators in the U.K., where 73% have plans to grow their footprint. This is followed closely by U.S. providers, at 55%. Instant reports that Europe, in- particular, is seeing aggressive expansion strategies. European providers are capitalizing on an average occupancy rate of 80%.
The rising acceptance of flexible office spaces coincided with a clear trend away from traditional offices and full-time, in-office work environments. There has been growing demand for private offices, meeting rooms, and spaces tailored to productivity and well-being. Operators have found that tenants prioritize not just cost-effectiveness but also a human-centric approach, with friendly staff emerging as a key driver for tenant retention.
One of the notable challenges affecting flex space providers is the rising operating expenses (OpEx), which have led 69% of global operators to plan rate increases for the next year. In the U.S., 55% of operators cite operating costs as the primary reason for rate hikes, while 36% of U.K. operators attribute the need for price increases to rising lease costs.
Despite these market and economic pressures, the sector is reported to be resilient, thanks to high occupancy levels. Globally, 86% of flex spaces report occupancy rates exceeding 70%. This outpaces occupancy rates in traditional office spaces that continue to struggle this year.
Another challenge cited by researchers is sustainability. Over 35% of flex operators are unsure whether their offices use renewable energy. However, this presents both a challenge and an opportunity for operators. By improving sustainability practices, providers can meet increasing tenant demands for green office spaces while contributing to broader environmental goals.
The anticipated growth of the flexible office space sector reflects the popularity of hybrid and remote work environments globally. Alongside the rise of flexible work environments, there has been a growing demand for offices that offer short-term leases and customizable spaces. Many landlords and providers are betting that workspaces will be less about having a permanent office and more about having flexible options that can change based on what companies and employees need.
