New report finds flexible workspace sector now important to occupiers and landlords
Flexible workspaces are making more inroads into traditional office markets, according to a new report by Colliers International’s Occupier Services Division which looks at the take-up of flexible workspaces in Asia Pacific office markets.
The Flexible Workspace Outlook Report 2018 found that while serviced and shared workspaces occupy just a small portion of office markets, they were now a fundamental part of the commercial real estate market.
In a survey of Asia’s top 200 occupiers, the report found 56 per cent were already using flexible workspace in some capacity and 91 per cent said they were considering it.
Theo Smyrniotis, Director for Occupier Services at Colliers International said flexible workspace was ideally suited to the Perth market, which had often been dominated by project related space requirements.
“The presence of flexible workspace operators within a building allows occupiers to pursue a ‘flex and core’ real estate strategy, with the ability to increase and decrease project related space as required,” Mr Smyrniotis said.
“This alleviates the risk of mismatched fixed lease terms and uncertain project life duration that triggered the high instance of sub-lease space in Perth during the market downturn."
The report found that landlords were increasingly looking at how to include flexible workspaces in buildings and while some were working more closely with flexible workspace operators to design market-relevant spaces, other landlords had started their own offerings.
In research on shared work spaces and technology companies commissioned by the City of Perth, consultancy Y Research found 24 shared work facilities were operating in Perth, with 12 facilities occupied by serviced office operators and 12 facilities occupied by co-working space operators.
In Sydney, the Colliers International report found flexible workspaces accounted for 2.6 per cent of the CBD office market and just 1.6 per cent of the market in Melbourne.
Mr Smyrniotis said it was likely the expansion of flexible work spaces in Perth had been stymied by the soft market conditions and the fact that Perth’s office market was considerably smaller than those on the east coast.
“However, this is due to change in the short to medium-term as international operators of flexible workspaces are actively scoping the local market and are looking to realise their expansion plans in Perth,” he said.