There have been many column inches written in the last 12-18 months dedicated to the Service Office market. Many of those have been highlighting some of the negative stories such as WeWork’s IPO, several operators closing sites and others collapsing (Such as The Clubhouse and Central Working). Despite this, here at Daniel Watney commercial managing agents are firmly of the view that the flexible market still offers a significant opportunity to landlords.
The rise of the service office market has been well documented and undoubtedly there has been a structural shift in the way occupiers consider their operational property needs. The attraction of greater flexibility and minimal capex costs has fueled a shift to occupiers being far more transient.
Whilst the early disruptors such as WeWork, TOG and _ have received some negative press of late, they have paved the way in providing office space as a service and demonstrated the benefits of doing so. Clearly though the model applied needs to be carefully considered. A number of institutional landlords have set up their own flexible offering for example, British Land and Story, Landsec and Myo for example.
Looking ahead, there is still growth potential in the flexible market. According to research by Global CoWorking Unconference Conference (GCUC) there are currently 3.1m coworkers across the world with this forecast to nearly double by 2022.
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