Flexible workspace is no longer a disruptor, nor a complementary sub-sector to the office market. It is a fundamental part of the commercial real estate market and a sector in its own right, growing in size and importance to landlords and occupiers. The average flexible workspace leasing term is now over 24 months, up from 12 months in 2013, demonstrating that it is now competition to traditional office space.
We have seen continued growth in the sector and across some major markets the take-up from flexible workspace operators has accounted for 40% of the overall market in 2017. This growth has been fueled by the thirst for flexibility from multinational corporations, evidenced by the percentage of deals for 15 desks or more increasing to 48% in 2017 from 32% in 2016, which in turn was up from 12% in 2014.
Flexible workspace is a 40-year-old industry, but has re-positioned itself and shaken off the drab aesthetics of the serviced office to become a hotbed of creativity and productivity characterised by compelling design – with data increasingly being used to make the design more efficient, boosting end-user productivity.
Serviced offices traditionally attracted small and medium-sized enterprises, together with multinational corporations that took up space for project teams, swing space or branch offices in new markets. Coworking spaces, meanwhile, were originally filled with early stage start-ups seeking a creative hub that allowed flexibility to grow their business… and offered free beer! The two have now blurred to the point of negligible differentiation, with coworking becoming more corporate and serviced offices more trendy. Hence the phrase ‘flexible workspace’ to encompass both.
We are now seeing multinational corporations taking up hundreds of desks for back, mid and even front office functions. Any trend in real estate is occupier led and occupiers are demanding flexibility to directly correlate their headcount to real estate costs and move away from long-term, fixed contracts. In addition, the opportunity to give staff mobility, a creative and productive environment, and the ability to turn capex in to opex has led to exponential growth in demand. In our survey of Asia’s top 200 occupiers, 56% said they were already using flexible workspace in some capacity and 91% were considering using it.
This outlook report examines the key forces shaping the sector, together with operator, end-user and landlord insights and a market-by-market snapshot across key APAC cities.
Head of Flexible Workspace Services
Tel: +852 9020 9200
Download the full report here
Published: March 2018
By: Colliers Research