While the WeWork model of an informal ultra-high-density community is not compatible with COVID-19, the flexibility that coworking has brought to the market very much is. Coworking spaces in their current form were born after the carnage of the global financial crisis and flourished as a home for the newly redundant and entrepreneurial. But it wasn’t start-ups and freelancers that propelled the global flex space sector to annual growth of 31% between 2015 and 2019 (source: JLL). Corporates started moving in, initially to profit from the feverish exchange of ideas, then on a much larger scale, to benefit from short-term leases and no-hassle premises under the space-as-a-service model.
Coworking business models will need to adapt, and the post-COVID market may look different. Tom Carroll, JLL’s executive director of EMEA research and strategy, has been tracking the dramatic rise of coworking and flexible space over the last decade: “In the short term, there’s quite a lot of pressure on that sector as lockdown has had a very tangible and real impact on occupancy within open coworking and shared space,” he says. “That’s going to put pressure on some operators, and we expect consolidation and some shifts as that shakes out.”
But agility will remain a significant driver for occupiers: “Flexible space has become an integrated part of portfolio strategy so we’d expect that to continue. In fact, we may quite quickly see a requirement for teams to set up or to leverage more flexible space solutions, even in the re-entry process and certainly as we move further forward. In the long term, we’re only going to be seeing more flexible, agile, dispersed and distributed work and portfolios."