London, February 2, 2021– As the European flexible workspace market matures over the next few years, commercial real estate firm Colliers International predicts there will be some merger and acquisition activity across the hundreds of operators in the market.
Following the announcement the flex workspace provider Knotel filed for bankruptcy yesterday and Newmark Group is looking to purchase part of the business, Colliers has re-emphasised the expectations for the market outlined in its Flex Forward report published in October.
Head of Flexible Workspace Consulting Tom Sleigh said: “The European market is highly fragmented with a number of flex providers and as the sector matures over the next year or so we’re expecting to see more merger and acquisition activity. This will most likely be in the form of distressed purchases.
“During 2019 we saw many operators opening new locations in the region, and even last year some new sites launching despite the challenges of the pandemic. In some markets, there is a flex supply deficit and we expect regional growth to continue as the sector matures.
“Real estate flexibility is key right now for corporates which are establishing their immediate post-COVID-19 working practices, as well as planning for their long-term real estate strategy. Many organisations are moving towards more agile and work anywhere models, and flex operators that provide high quality service and a range of amenity offerings such as work lounges, bookable meeting rooms, and leisure facilities, are in demand as they elevate employee experience, improve productivity and help to retain and attract talent.
“The market segment Knotel focused on involved fitted suites, and this has seen increased competition as many landlords across the world are responding to the changing needs of occupiers and are offering their own fitted out, flexible office products. Occupiers are demanding more optionality in lease term as well as simplicity of office occupation, and asset owners are not standing still.”