by Brianna Crandall — April 29, 2020 — In the first of a series of online sentiment surveys among flexible and coworking space providers around the world, Workthere found that 26% are optimistic about the prospects for the sector over the next three months, while 62% felt the same about the next 12 months. The UK-based flexible office specialist also found that providers in North America are most optimistic, followed by Europe and then Asia.
Workthere’s Flexible Office Provider Sentiment Survey collated over 101 responses from a variety of providers in 11 countries across the world to understand their position and plan moving forward, as well as their sentiment on what the short and long term picture looks like for flexible offices. The responding offices are located across Canada, France, Germany, Hong Kong, Ireland, Singapore, Spain, the Netherlands, the United Kingdom, the United States and Vietnam.
Other key findings from the survey include the fact that coworking space occupancy before the COVID-19 pandemic was at an average of 83% globally and is expected to be at 71% by the end of May. Current enquiries for this type of space are at 20% of normal levels globally, with Asia seeing a greater proportion of clients not renewing contracts at 27%, compared with 13% in Europe and 12% in North America.
However, interestingly, Asia has seen a higher level of enquiries so far in April at 33% of the normal levels against 16% and 19% in Europe and North America respectively.
Jess Alderson, global research analyst at Workthere, commented:
Our flexible office sentiment survey provides a snapshot of the current market conditions in this sector and the associated impacts of COVID-19. It is encouraging to see an optimistic bias for the 12-month outlook and global occupancy levels over 70%. It is also interesting to see the responses from Asia, who are at a different point in the cycle, against those in Europe and North America.
The survey also showed that 33% of members globally have asked for some form of rent relief, and this number is consistent across all regions. The most common form of relief granted by providers to members include:
- Deferring rent for a month and extending the license agreements;
- Allowing members to downsize space; and
- A 20-50% rental discount for one month.
Cal Lee, global head of Workthere, remarked:
The flex market is clearly exposed in the short term to any market impacts such as what we are witnessing with COVID-19. It is at risk from companies that are not renewing contracts as they go into survival mode, and we expect that these figures will rise come the next survey in May as more members seek help, putting further pressure on providers.
For now, teamwork is paramount in ensuring the relationship between landlord, operator and customer continues to run smoothly as businesses begin to think about returning to work and what that might look like. Those providers that work with their customers to help them through this time are likely to see a return of loyalty by that customer in the years ahead. The sector is in a good position to bounce back in the short term, and looking forward to the longer-term prospects, it is set to play a vital role as office occupiers look to the flex market in order to diversify and add resilience to their occupational portfolio.
Workthere plans to run this survey on a monthly basis in order to help track sentiment and key statistics about the flexible and coworking office market. There is no denying that this is a challenging time for flexible offices, but there is light at the end of the tunnel, says the advisory service. Flexibility in terms of costs and office space in particular will be valued even more highly going forward, and flexible offices are in prime position to take advantage of this trend.
For a pre-COVID-19 outlook for 2020, see also Workthere’s What Coworkers Want survey, released in December.
And for tips aimed at those who are working from home during the coronavirus pandemic, see also Workthere’s Guide to Remote Working.