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“The traditional office model was not facing enough competition”

by | Jul 22, 2020 | Coworking, Data, Flex Workspace, Podcast | 0 comments

John Williams and James Rankin are respectively CMO and Head of Research at The Instant Group, a multi-service company focused on flexible workspaces and coworking products. Instant has a unique position to spot the latest trends in the coworking market on the EMEA level as well as on the international field. We have interviewed these two very knowledgeable gentlemen to know more about where the coworking world is heading in the post-Covid19 crisis.

Main takeaways

The highlights from our conversation are summarised below:

  • Demand for flexible workspace looks to regained a lot of its momentum over the last month and most EU markets looked to have similar levels of interest to Pre-Covid three to four weeks ago. Over the last 1 to 2 weeks it appears to have slipped. What has caused this: caution around secondary spikes in Covid-19, increased information about the effects of remote working and therefore a longer but more insight based decision making process.
  • That being said, seven of our top thirteen global markets are still seeing demand levels high than those found pre-covid and really only Spain and the UK are significantly behind previous levels.
  • While interest or demand appears high there is still three more stages before we see sales (enquiry, viewing, transaction/move in) therefore how much longer is it before we see transactions increase.
  • Coworking looks to have been the most impacted market during Covid-19 but also was able to respond the quickest, probably due to the communities that these spaces created and the smaller occupier groups they attracted. Lots had already decided that work from home was not the right option for them. But due to this, we saw the average deal size of transactions increase across EMEA during Covid-19 to 8.3 workstations, a 22% increase on 2019 levels.
  • There is a lot of talk in the industry about the office being “dead” and news channels have picked up on this. The reality is that our customers are not saying this but they are looking to change their long term strategy with all of the large corporates that we talked to indicating various levels of intent.
  • One of the big up and coming trends that everyone is talking about is the move to a hub and spoke model. Our data shows not only is this already happening with demand for spaces in satellite towns and villages now consistently above that of the primary city but the impact of Covid-19 to these markets was far less. A good percentage actually didn’t see demand levels drop during Covid-19, which is an indicator of the robust nature of these localised market even in tough economic climates. That being said, supply is often severely lacking and that is the next piece of research we will be undertaking.
  • Pricing has been impacted to various levels with some providers saying its only incentives being offered and therefore short term but our data is showing a sharp decline in transacted rates across Europe with secondary cities and rural locations seeing the highest impact at the moment.

You can also watch the full video conversation.

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