In its most recent Flexmark study, Savills flexible office specialist Workthere reports that 87 percent of UK providers are profitable with 63% of them having profit margins of more than 15 percent, which is fifty more than the number reported in 2021. It is a report that polled flexible office providers around the world to offer an overview of the industry as well as reveals that the percentage of companies worldwide reporting profit has increased from 82 percent to 89% year-on-year.
In it’s third season, the Workthere Flexmark report provides a glimpse into the market for flexible offices prior to, during and after the pandemic and shows that occupancy rates worldwide have risen across private and shared offices that are currently at 81 percent and 69%, respectively and are similar to pre-pandemic levels.
Cal Lee, global head of Workthere, a global company Workthere and Workthere, says “The rise in profits is certainly a result of the increasing demand for flexible workplaces all over the world. This is why we’ve seen occupancy rise to pre-covid levels as well as desk prices worldwide increased by 7%, as opposed to a decrease of percent in the survey last year. These two factors along with a limited expansion of flexible office providers, have resulted in a change in the percentage in flexible office spaces that make money at an operational level*.”
If we look at the types of occupiers and type of occupier, the Flexmark report shows that there is an evolution regarding the type of people who are occupying the space, that shows more diversity in the market. Corporates (101or more individuals) along with massive scaling-ups (21-100 people) account in 42% the take-up globally, more than 37 percent in 2021. In the UK there are corporations occupying office space is 24%, compared to 7percent in 2021 with small-scale startup companies (2-10 people) making up 27%, while startups (11-20 individuals) and scale-ups combining for 22 percent. These numbers show that the distribution of occupiers kinds has become more even and reflects a stronger resilience in the market.
Despite an increase in occupancy, Workthere reports that 71 percent of respondents to the Flexmark survey reported they feel their workplace was not being utilized in a maximum capacity due to the shift to hybrid working. 78% of the providers worldwide said that their members use the space at least three or four times per week, and that number jumped to 94% when analyzing results from the UK results.
Jack Williamson, head of Workthere UK, says: “Given that the UK was among the first countries to lift limitations and return to a regular lifestyle It’s not a surprise that we have a greater percentage of employees returning to the workplace throughout the time during the week. This could also be the reason why the UK is able to make the most use of space, with 78% of the average desk space, even though spaces for collaboration and meeting have been growing in importance, further bolstering the trend towards more active working to increase the quality of life and productivity.”
* Defined as operational costs, divided by the revenue.
