In 2019, Demand for Flexible Workspace is Set to Increase in Secondary Cities

In 2019, Demand for Flexible Workspace is Set to Increase in Secondary Cities

updated March 19, 2019
In 2019, Demand for Flexible Workspace is Set to Increase in Secondary Cities

Demand for flexible workspace is set to expand outside of the primary global city-based markets, with over 70% of this space available in smaller secondary cities, according to research by Instant Offices.

In 2018, the flexible workspace market showed significant movement, with an increased number of corporate clients looking for flexible space. In 2018 alone, corporate demand increased by 21%. Landlords are also taking a greater interest in the sector in the wake of this increased demand, that is why investing in real estate is a good idea.

In the face of increased living costs, many companies are looking towards secondary cities to reduce costs and increase affordability for their employees.

Forbes announced that in Europe, Manchester and Toulouse were the fastest growing markets thanks to increasing investment and a growing corporate focus. All EMEA cities, including Manchester, Lille and Frankfurt, have seen supply grow by over 15% in response to accelerated demand. Europe is forecast to see 255 million sq. ft. of flexible space in 2019 – an increase of 12%, with over 70% of this space being available in smaller secondary cities.

By the end of 2019, 40% of demand is expected to come from large corporates, with the average tenant taking seven or more desks in flexible space. Global demand in the flexible workspace sector has increased by 50% over the past five years. Instant Offices estimates the global market to incorporate 32,000+ centres, which represents an increase of 15% year on year since 2013.

“London rates are forecast to remain the highest in Europe at £644 in 2019, which alongside strong demand means suppliers continue to move into the market. It is expected that the flexible market will make up 7% of the London CRE market in 2019 on the back of continued investment and growth.”

John Duckworth, UK and EMEA MD, The Instant Group, said: “There is still a huge focus on the larger flexible workspace operators and their future expansion plans, but the industry remains heavily weighted towards independent and localised providers and they remain the ones to watch.

“This is where real innovation is happening in the model. Businesses are quickly realising that flex provides a versatile and agile workspace in central locations and this growth in demand has encouraged many more traditional operators to expand rapidly.”