- The city saw nineteen per cent growth in demand between 2022 and 2023.
- Mexico City saw a remarkable 163% leap in demand.
- Five out of the top ten saw declines in flex office demand.
The flexible office market experienced major shifts during the pandemic, diving in and out of supply-demand challenges and more, according to The Instant Group.
Between 2022 and 2023, a mere five out of the top ten hottest flexible office markets recorded increased demand. While the remainder of the top 10 saw reduced demand, overall growth remained positive.
Top 10 hottest flexible office markets
- London, England
- Mexico City, Mexico
- Riyadh, Saudi Arabia
- Dubai, United Arab Emirates
- Sydney, Australia
- Chennai, India
- New York City, United States of America
- Colombo, Sri Lanka
- Singapore, Singapore
- Berlin, Germany.
Emerging flexible office hotspots
The Instant Group’s top ten saw significant leaps in demand across Mexico City and Riyadh, with other cities also seeing notable increases.
Year on year demand change for 2022 to 2023
The significant increase in demand recorded in Mexico City was indicative of the city’s “bold recovery from the pandemic” according to The Instant Group’s report. Factors driving the surge included nearshoring, cost savings, and operators with capacity for large enquiries.
Reduced demand not a blow for the industry
Drops in demand are not necessarily indicators of a struggling market, noted the report, with the decline observed across some locations likely due to the dust settling following a tumultuous few years.
It was noted that several markets were in a ‘post-Covid bubble’ across 2021 and 2022, with demand returning back to pre-pandemic growth levels.
To illustrate the point, the report noted that Chennai and Singapore both recorded incredible surges in demand across 2021 and 2022; Singapore, in particular, recorded 126% growth in flex demand in 2022. Despite the latest report finding the cities recorded a four per cent and 27% decline in demand, respectively, the compound average growth rate over the past five years remains positive for both cities, +11% and +4%, showing demand remains above pre-pandemic levels.
According to the report, the current changes in market indicate a degree of maturing, with cities continuing to record gradual growth, post-2022 spike.
Sydney market sees large demand from tech sector
A coworking location set to open in January next year has secured over 60% pre-commitments, mostly comprising off-shore technology businesses.
Tech companies signed up at level 29, 85 Castlereagh Street include Ninjatech.ai and AB Tasty.
According to The Great Room by Industrious’ general manager, John Alfafara, demand to date has been largely driven by tech businesses with property, financial services, and legal services among other sign-ups for the new Sydney space.
“Many off-shore tech groups use Sydney as a launchpad into Australia,” said Alfafara.
“They are drawn to our economic resilience, high demand for skilled labour, leading universities and tech research, government programs, connectivity to Asia-Pacific and of course, the lifestyle Australia offers.”
CBRE research manager, Thomas Biglands, noted that the Sydney market is well suited to support coworking, with over half of office leasing enquiries for 2023, so far, being for spaces less than 500 square metres.
“Coworking can offer these firms flexible space options while they gauge their longer-term office requirements.”