The flexible office market is heating up, leading to higher asking rents

Flexible spaces are increasingly seen by occupants and owners as a necessity rather than a temporary solution. And just like in the office market as a whole, there is a flight to quality in flexible office space. Demand for flexible spaces has recently increased with the shift to hybrid working, and a reduced set of options to choose from has led to higher asking rents, according to a report from Workthere, Savills’ technology-enhanced flexible office brokerage. .

New York and San Francisco, unsurprisingly, have become the most expensive flexible office markets in the world, and Berlin is the fastest growing market in Europe. Private coworking office spaces in New York cost an average of $961 per month, followed by San Francisco at $950 per month. Other cities in the top 10 most expensive flexible spaces are Singapore, London, Berlin, Austin and Paris. It’s no secret that employers are trying to lure employees away from remote work into high-quality office spaces, and this trend applies to coworking spaces as well, according to Griffin Foley, Northeast Manager. is for Workthere Americas.

While occupancy rates in the traditional office market are still generally low, the flexible market has performed better after a brief pandemic-induced dip in 2020. For example, the Berlin flexible market has limited supply with a rate current vacancy rate of 3.5%. Flexible market growth is driven by the science, digital and technology sectors, and the market as a whole has seen only a 1.4% decrease in space over the past two years , according to Workthere.

Owners are adding more flex spaces to their product lines to meet occupant demand, which is expected to continue into 2022 barring unforeseen circumstances. A recent report from Colliers International predicts that more flex products will be offered this year, including more owners developing their own flex products. The “work from anywhere” trend has radically changed the office, and the competition for flexible spaces may heat up even more soon.

Jose C. Birney