Covid-19 has proven a baptism of fire for flexible workspaces. At a moment's notice, many providers were forced to close their spaces for a while and some closed their doors for good. Even those offices that defied the pandemic and remained open were scarcely frequented. While actual co-working activity essentially fell to zero, overall occupancy was supported via long-term memberships. Many operators reacted quickly by offering competitive extensions to packages and increasingly converting open-plan areas and event spaces into private offices. At the end of last year, providers of flexible offices expected an occupancy level of 74%, which is only ten percentage points below the level prior to the pandemic.

This can also be viewed as an indication that providers are once again expecting increasing and possibly even additional demand. Their concepts are particularly attractive either to companies who prefer flexible office space rather than committing to a new long-term lease in view of the transformation in workplace concepts or to those companies that appreciate flexible offerings since their leases are about to expire or they have a termination option. There is also an increasing number of companies seeking to increase the proportion of flexible space in their portfolios. All of this points to stronger demand. In addition, the pandemic has heralded a breakthrough in geographically flexible working. Previously only practised by a small number of people, such models have now been adopted by millions worldwide. We particularly expect rising demand for flexible workspaces in the suburbs and in rural areas since people are seeking to work closer to home and to maintain a healthy work-life balance. Many companies are already responding to this trend with a hub-and-spoke strategy comprising a central office location (hub) and a number of peripheral offices (spokes). In a study by Workthere from October of last year, 33% of flexible workspace operators surveyed in Germany stated that companies are particularly seeking office space in the outskirts of cities and this trend is rising.

New players in the market are responding to this trend, one current example being Deutsche Wohnen. The company believes there will be a long-term change in working models and plans to offer co-working space in a vacant bank unit in the Berlin borough of Hellersdorf close to residential locations. Hotels have also begun testing the market and are increasingly offering flexible workspaces. Meanwhile, established providers are reinventing themselves. WeWork’s pilot project for on-demand booking proved so successful that other providers have also started offering flexible packages with day passes.

With take-up from flexible workspace providers in 2020 coming in at only around 11% of the previous year’s total, these can now be expected to benefit from the significant demand for flexible office solutions going forward. The recently announced record start to 2021 by the world's largest workspace operator IWG, with more than half a million new users within the first two months, is likely to be more than a mere hint as to what the future holds.