The Global Flexible Office Sentiment Survey: How COVID-19 has Impacted Flexible Offices Around the World

Since publishing our Workthere Flexmark report in January, a lot has changed. The flexible office market now bears very little resemblance to what it looked like only three months ago and, of course, this is true for many other industries too. One of our goals at Workthere is to increase the transparency of data within the flexible office market and, with this in mind, we have launched ‘the Workthere Flex Global Sentiment Survey’ in order to help better understand how COVID-19 is impacting flexible offices around the world.

The scale of the impact on the sector in the short term is reflected by the fact that only 25% of flexible office providers are optimistic about the prospects for the sector over the next three months. However, they are overwhelmingly positive looking out to the next 12 months, with 62% saying that they are optimistic about the prospects for the space, and this number rises to 75% for respondents based in North America. Global providers are also more likely to be optimistic about the future of the sector.

Enquiries about new flexible office contracts have fallen 80% since the outbreak of COVID-19. However, this hugely varies by region, with Europe having seen a fall of 84%, North America 81% and in Asia enquires adown only 67%. This is in contrast to the portion of members not renewing their contracts, which is highest in Asia at 27% compared to less than 15% in Europe and North America.

Occupancy pre-COVID 19 was 83% globally and providers expect occupancy to be at 71% at the end of May, which is in line with our expectations of occupancy falling 5-7% each month. Coworking occupancy has essentially fallen to zero, but the average contract length for companies based in flexible offices is 12 months, which provides some kind of rental support for flexible offices.

However, many companies within flexible offices are struggling financially and one third of members have asked for rent relief, with this proportion being fairly constant across all the regions. Nearly every flexible office provider we have talked to about rent relief has said that they are considering each case individually. The most common forms of rent relief are: (1) deferring rent for a month and extending the licence agreement, (2) allowing members to downsize their space and (3) 20-50% rental discount for one month. We understand that a number of flexible office providers have asked their own landlords for rent relief.

We will continue to run this survey on a monthly basis in order to help track sentiment and key statistics about the flexible 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. Flexibility in terms of costs and office space in particular will be valued even more highly going forwards and flexible offices are in prime position to take advantage of this trend.

Take a look at our snapshot of results here. You can view the sentiment breakdown across all regions here and our UK vs. Europe sentiment breakdown here.

Methodology

• Our analysis is based on 101 flexible offices around the world, located across Canada, France, Germany, Ireland, Singapore, Spain, The Netherlands, The United Kingdom, The United States and Vietnam.
• The data was collected via an online survey that we sent by email to flexible office providers.
• Data was collected during the period of 14^th April 2020 until 20^th April 2020. 
• A ‘member’ is defined as one membership agreement. This could be for one person or one membership agreement for 150 people.

Read our full press release here.