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Rob Wood

 
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The flexible office space industry looks strong despite WeWork IPO issues​

Last week saw the publication of a Guardian article suggesting that WeWork’s valuation may be inflated, at least according to Wall Street. Indeed, since then WeWork has delayed its IPO until the end of the year at the earliest. This may be bad news for WeWork’s investor SoftBank but fortunately not for flexible office space, which continues to increase in popularity.

By signing longer property contracts, flexible office providers like WeWork are taking the risk on behalf of their tenants. In periods of recession or unpredictability, it is exactly the flexibility of these office spaces that organisations need to survive.

We saw this trend almost a decade ago when the serviced office market grew by 20% during a period of recession. This can in part be attributed to the spike in freelancers and start-ups seen post-recession, leading to a corresponding spike in the demand for pay-as-you-go offices. Indeed, even corporates using flexible office can find relief during a recession.

Alongside the traditional flexible working model, coworking spaces are drawing tenants from both ends of the spectrum. Larger companies are moving into these spaces for proximity to SMEs and start-ups. The office has become far more than a place to go just to get work done. It can be a place to network, to team build, to innovate, and to focus. But in order to facilitate all of these things, the workplace itself must be well designed and innovative. 

This means spaces must be technology enabled and offer a variety of working places, such as communal areas, private office and meeting rooms. Many coworking spaces are taking this further by providing social spaces and amenities like gyms, games rooms, and quiet spaces. These spaces are catering to the younger workforce’s demand for a better work-life balance and in turn, improving employee wellbeing and performance.

Workplace design is becoming both a science and an art. Employee demands change rapidly with an ever-fluctuating workforce. Being able to partner with an expert workplace provider and having the flexibility to move is becoming more and more important to employers. As such, the flexible office market is continuing to grow. 

It will be up to providers to strike the balance between reliance on a handful of bigger corporate tenants with the greater variation that comes from a larger number of smaller organisations.

We’ll see in the coming months how WeWork’s flotation works out, but in the meantime, they certainly don’t show any signs of slowing down in terms of purchasing new space or in finding clients to occupy the space. Flexible office space, whether through WeWork or any other provider, is as popular as ever.

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