Relax, Flex Space Is Still Mainly About Tech

The new normal turns out to be much like the old normal, if data on the European flex office space market from CBRE is borne out.

The technology, media and telecoms sector dominated activity in the European flex market in 2022, CBRE said. 

TMT accounted for 52% of transactions in Europe by number of deals, and 62% by number of seats acquired. This demand is partly driven by more dynamic changes in headcount within the sector, CBRE added.

Until now this has been due to rapid growth but more recently the finger points at industry consolidation, which better lends itself to more flexible solutions to ensure a rightsized portfolio. 

In comparison the professionals were significant but by no means massive players in the flex floorspace world. Financial and professional services accounted for 21% by number of deals and 27% by number of seats acquired. CBRE said the sector remains focused on return-to-office strategies for core buildings, and not the world of flex.

CBRE tipped life sciences as the sector to watch as it expands in the flexible office market.

Overall, flexible office space continues to grow its appeal, and CBRE predicted growth will be yet more pronounced in 2023 as occupiers respond to economic uncertainty.

“Throughout 2022, we saw transaction volumes and occupier enquiries continue to accelerate and our research shows a 37% increase in transactions completed across the whole market when compared with 2021,”  CBRE Senior Research Director Richard Holberton said.

Global flex space operators have yet to feel much benefit. Earlier this week IWG reported a strong rise in revenue but not enough to turn annual losses into profits.

The company narrowed pre-tax losses from continuing operations to £105M in 2022 from £259M in 2021, while its total loss for the year fell to £120M from £210M.