The flexible space market experienced significant changes as a result of the COVID-19 crisis, immediately reducing the need for short-term desks. JLL’s latest research shows the need for flexible space is not only here to stay, it’s likely to increase. predicting that 30 percent of all office space will be consumed flexibly by 2030.
Accounting for over 10-20 percent of leasing activity in many markets in 2019, flexible space has grown from a marginal business sector to a key pillar of growth in most global gateway cities over the last decade.
Society is assessing if it’s necessary to work in a fixed, permanent position daily. Even prior to the outbreak of COVID-19, four out of every five employees reported that given two similar job offers, they would turn down the one that didn’t offer flexible working, according to the 2019 IWG Global Workspace Survey. Therefore, remote and flexible working practices are now expected and no longer seen as just a perk.
As a result, employers are evaluating ways to reduce office densities, save costs and support employee demand for shorter commute times and productive work environments. Investors are expected to make shifts in their flexible space operational models to increase the long-term value of their assets by offering a spectrum of flexible options to meet the increasing tenant demand.
Key takeaways:
- Enterprises will increasingly expect landlords to offer the ability to flex as an amenity as their business changes.
- The focus on health and well-being will only increase in the future. The densification trend that had been happening over the last decade will likely reverse.
- Investors will be much more focused on security of covenant and will be more analytical in working with flexible space operators in future.
- There will be more focus from flexible space operators on management agreement models as leasehold operators no longer have leverage.
- Well-capitalized flexible space operators will restart their expansion drive, picking up assets and market share from those unable to weather the storm.
