New Work Market Analysis 2022, 3rd Edition – Post pandemic office space solution
The changes in the office markets that we witnessed in 2021 were only a preparation for what would come in 2022 and beyond. The shared economy and digitization are leading to a revolution in the office sector, and the adaptation of hybrid working models by multinational corporations is acting as an accelerator.
New Work 2022’s annual market report, presented in Warsaw and broadcast internationally, provides some insights.
While in 2019 the market was still weighed on for flexibility to remain, by 2021 flexibility had become a necessity for every landlord and the question for 2022 was: How much flexible space do I need to add to my portfolio to stay competitive?
The demand for flexible office solutions is increasing, not least because of the uncertain planning horizons that tenants face in today’s rapidly changing business environment. We also observe changes in lifestyle, societal values and behavior caused by working from home during a pandemic. Flexible spaces adapt to these changes much better than traditional offices.
More and more companies around the world are moving from an office-oriented approach to a human-centered approach and implementing hybrid systems in their workplaces. The company’s headquarters will never be the main place of work again. Rather, it becomes a place for cooperation, socialization and meeting. Once companies go through this change in corporate culture, it will lead to a significant reduction in office space requirements.
“With all these changes, the flexible office industry is becoming the fastest growing real estate segment in addition to logistics. The introduction of digital marketing and sales tools takes the infiltration of flexible spaces even further, as this product is specifically designed for such uses, ”explains Hubert Abt, CEO and Founder of New Work and Workcloud24.
In addition to the convenience, immediate availability and flexible conditions it offers without the need for additional investment, the growing demand for flexible offices is also based on the fact that people have become accustomed to the benefits of a shared economy in many areas of life. As soon as the office industry changes its current “Space as an Office” product and starts offering “Space as a Service”, clients will use these services in the same way as today’s shared cars.
Real estate is not the first, but one of the last industries to adapt to digital products and services. The need for digitization comes for a variety of reasons and is irreversible. If office operators want to meet the requirements of ESG, the needs of a hybrid work style and provide their customers with smart solutions that can be used in other areas of their lives, they must invest in technology.
“Landlords who are unable to provide flexible terms will lose 30% of their market potential,” says Hubert Abt.
Flexible industries face challenges despite guaranteed growth.
The flexible office industry was hit hard by the onset of the pandemic, and although the recovery in 2021 was significant, the price of the fight to increase occupancy was a reduction in revenue per job. According to the latest DESKMAG survey from December 2021, 70% of operations are not profitable. Nevertheless, the overall overview is very positive. According to DESKMAG, 79% of operators described their business situation in November 2021 as satisfactory, while in 2020 it was only 50%. 62% of respondents reported improvement over the last 3 months and 41% expect further improvement over the next 3 months.
While in 2019 only 5% of the flexible space in the building was perceived as a healthy share, today this figure has reached over 10% and continues to grow towards 20%. In line with this trend, New Work aims to open 10 new locations in 5 different countries in 2022 with local partners and expects further growth through its franchise network in shopping malls and large residential projects. The company is committed to keeping up with ESG standards and taking the lead in current market trends, ”concludes Hubert Abt.
Author: New Work
