Flexible office setup is a budding trend within office markets across the globe. The flexible workspace and co-working trend, basically a post-Great Recession event, carry on to evolve and flourish. Coworking is among the few developing office demand sources, as per Colliers International. And there is much scope for its development. Flexible office space, in spite of all its development during the past decade, still registers merely a tiny proportion, below 2%, of the entire office space within primary office markets, as mentioned in the reports by Colliers.
The rising number of medium- and small-sized businesses, which comprise 60–80% of jobs in an economy, plays an important role in driving the flexible office market. In the last 10–15 years, there has been a rise in small business creation, far exceeding the development of bigger businesses and are anticipated to continue in the coming period as well. Technology is a key growth catalyst of this market, decreasing obstacles for entering the market and enabling small businesses to enter a broad array of markets. Corresponding to the arrangement of key economies, small occupiers make up around 60–80% demand for flexible offices. Further, these rapidly developing small companies are less expected to want to have a 5-year lease deal for a preset amount of space, as space requirements are prone to change in the future.
In addition, the growth in key industries such as information & communication, finances, and business service is also likely to impact the growth of the flexible office market. As per the forecasts, the rising development in knowledge-based domains is expected to boost these sectors at a rapid pace in the years to come. Also, other industries are flourishing with a rise in project-based work, wherein teams collaborate and disband when the projected is completed. This, in turn, is anticipated to boost the expansion of the flexible office market.
Moreover, the geographical reach of the companies has increased extensively due to technological advancements, making the firms’ client base more geographically varied. And as having established offices in several places can be a costly investment, membership-based flexible offices can enable small businesses to have a place for client interaction. This trend is likely to help the market flourish during the forecast period.
Apart from this, the increase in the self-employment with momentous traction gained by the freelance industry over the past few years is expected to drive the flexible office market growth. Further, a key requirement for flexible offices from gigantic corporations is anticipated to fuel the flexible office market growth positively in the years to come. In fact, corporate firms are looking for supple places and thus, are attempting to get flexible spaces on a leasing basis. Further, market players are also implementing several approaches to extend their business reach.
To cite, a commercial real estate tech firm, SquareFoot, recently purchased a flexible office space marketplace, PivotDesk. It links firms with surplus office space to other firms that require space, may it be a purpose-built co-working space or one desk in a common office. Also, service was launched by SquareFoot dubbed FLEX, wherein office occupants can go for much shorter rent duration than they were capable of previously. SquareFoot’s CEO, Jonathan Wasserstrum, predicted, “More firms are seeking flexibility in relation to their rents, and that is going to increase in due course. Though it is the ideal way out for each firm, transforming is not possible at once. The average firm is already on rent since flexible solutions were not as ordinary a few years ago, however, as previous agreements come up for restitution, we are going to witness that change.” All these trends are likely to help the flexible office market witness positive growth during the forecast period.
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