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Growth of flex offices on pause due to the corona crisis

flex workspace
The Dutch flex office market has grown rapidly over the past decade. In recent years, this growth has leveled off somewhat and due to the corona crisis, it is now on pause. In the year before the corona outbreak, flex lessors still accounted for 3% of the total office take-up, in the following year this was 0.7%. This is evident from research by real estate consultant Colliers.

2.5% of the Dutch office space is currently a flex office, the same percentage as last year. That doesn't seem like much, but it does mean that our country has the largest flex market in Europe. With a share of 6.2%, Amsterdam is in second place of the 42 European cities surveyed by Colliers, after Copenhagen. Eindhoven follows closely with 5.9%. There are many startups and scaleups in the tech sector here who need room to move in their accommodation.

Step back
“Flex providers are temporarily slowing down,” says Jacqueline van Woerkom, office expert at Colliers. ''More flexibility in the contracts means that they can be canceled more easily. The work from home advice contributed to this. Meeting rooms were also hardly rented out due the five feet away. Vendors that have entered the market in recent years, opened new locations too quickly, or have been heavily financed with outside capital are having a hard time. Yet there have been no noteworthy bankruptcies.”
The need for more flexibility is increasing in the long term due to the corona crisis. The strongest providers will soon reap the benefits. “Companies want to be able to move with the economy with their housing,” explains Van Woerkom. ''Not only the flex landlords see this. We are seeing more and more traditional office rental companies and even hotels discovering this market. In addition, there are more collaborations between flex landlords and companies with large office floors.”

Openings are outpacing closures
The European flex office market is also slowing down, but has certainly not come to a standstill. Last year 45 new landlords started in the 42 cities. 211 new offices were opened, equivalent to 529,000 square meters. That is more than the 123 closed branches that together represented 211,000 square meters. Only 25 planned openings ultimately fell through. By way of comparison: in 2019 there were 87 new landlords and 307 new branches with a total of 925,000 square meters. Only 48,000 square meters closed the doors in that year.
 

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Jacqueline van Woerkom

Senior Consultant | Tenant Advisory

Amsterdam

Jacqueline started her career in 1991 at DTZ. In 1998 she was asked to join a new real estate company which became Colliers International The Netherlands in 2001. She was closely involved in the growth and expansion. Jacqueline’s career is now focused on tenant representation and advising international and corporate clients. She has served the needs of clients like Bosch und Siemens, Embraer, Mattel, Philips, ING, L’Oréal, Aon, ServiceNow and many others. 

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