Research

The May Global Flexible Office Sentiment Survey: Flexible Office Optimism Growing

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26/06/2020

Last month, we launched the ‘Workthere Global Flexible Office Sentiment Survey’ in order to help better understand how COVID-19 is impacting flexible offices around the world. We had a great response and we will continue to conduct the survey on a monthly basis.

Flexible office providers are significantly more positive about the prospects for the sector compared to a month ago. 42% are now positive about the prospects for the next three months, compared to only 25% in April. Long-term sentiment has also improved, with 74% of flexible offices stating they are positive about the prospects for the sector over the next 12 months, compared to only 64% for the previous month.

Globally, enquiries were up 40% in May compared to April. The level of enquiries are up month-on-month in Europe and Asia, but down in North America. The portion of members not renewing their contracts is highest in the US at 19%, followed by 15% in Asia and then 12% in Europe.

Occupancy pre-COVID 19 was 83% globally and providers expect occupancy to be at 69% at the end of June. Coworking occupancy has essentially fallen to zero in many countries, but it is worth noting that the average contract length for companies based in flexible offices is 12 months according to our internal data, which provides some rental support for flexible offices.

A number of companies within flexible offices are still struggling financially and 31% of members have asked for rent relief, with this number at 38% in Asia, 33% in North America and 28% in Europe. 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.

There has been an interesting shift in the source of demand for flexible offices. The highest demand is now for suburban flexible offices, with 37% of flexible offices saying that they are seeing most demand for these particular spaces. 36% say they are seeing most demand from companies downsizing from a lease. Swing space (a temporary working environment) and extra space needed due to social distancing are other key sources of demand at the moment. 

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. This is clearly still a challenging time for flexible offices, but the recent data shows that the outlook is already starting to improve, both in the short-term and the long-term.

You can view the sentiment breakdown across all regions here and the UK breakdown here.

Methodology

- Our analysis is based on 90 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 13th May 2020 until 21th May 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.