Rise of flexible workspace a challenge to classic landlords

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The growing demand for flexible workspaces in Asia Pacific gives rise to competing interests between operators and landlords, a report by a real estate services firm showed.

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“Flexible working operators are boosting demand, so over time landlords may expect greater competition for office space,” according to Colliers International.

The demand for flexible workspace in the region is driven by certain factors such as the new generation of workers, attention to technology and innovation, and the growing number of flexible operators.

KMC Mag Group Associate Director for Office Leasing Rosario Carbonell earlier noted the demand for flexible workspaces does not pose a threat to developers that lease office spaces

Rather, it compliments their operations as they cater to clients with smaller space requirements, Carbonell said.

Colliers also noted the advent of flexible workspace providers may even benefit developers with high vacancy levels in office developments.

It acknowledged the negative side in the rapid growth of flexible workspaces in the region.
“We see a risk of over-expansion on a local scale by flexible working space operators, which raises the possibility of a glut of empty space appearing in certain areas, depressing rents and maybe capital values,” Colliers said.

“This risk applies particularly to flexible working space operators focusing on the low end of the market, and less so to companies occupying high-grade buildings in prime locations,” it added.

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