But although they
were forced to keep offices open that lay empty, the help from government never
came.
In recent
weeks, however, signs of life have returned to the flexible workspace market.
So is the sector out of the woods – or are just some parts of it staging a
recovery?
The
consensus is that it is too soon to call but that there are some promising
signs.
“I think
it’s still very early days, but there is certainly cause for optimism,”
says Jane Sartin, chief executive of the Flexible Space Association.
“The
prime minister’s statement [encouraging people to start returning to offices]
added a degree of clarity and it was a good step forward. People are
starting to plan ahead a bit more now. Schools going back will be the next
big step.”
She adds
that members of the trade association have reported a significant increase in
requirements in recent weeks and that there are three noticeable trends.
“There are
corporates wanting elements of flexible space to add to existing offices,” she
says. “Then you have SMEs seeking one-to-two-person offices because new
businesses are always born out of difficult times.
“And the
third trend, which we’re seeing a lot more of, is businesses looking to move to
a regional hub-and-spoke model.”
The
Office Group (TOG) co-founder Charlie Green says enquiries have increased
significantly in the past four weeks and are also starting to convert into
in-person viewings.
“It’s
very encouraging,” he says. adding that demand is not just coming from
companies seeking flexible space as a response to the impact of coronavirus.
“More
enquiries are coming from corporates and companies coming from traditional
leases than we’ve seen before,” he says.
Sam
Dawson, global head of flexible transactions at Kontor, says it too has seen a
steep increase in activity. “There’s been a change from general enquiries to
genuine requirements,” he says. “We’re getting back to the numbers of enquiries
that we were seeing before, and we’re [at] multiple viewings a week now.”
Dawson
adds that the average size of requirement from businesses looking for flexible
workspace desks has increased from pre-Covid levels, suggesting appetite for
the product has grown during lockdown.
“Typically,
we’re looking for between 40 and 150 workstations regularly at the moment,
which is higher than the average before coronavirus.”
Despite
the ongoing market challenges, TOG is looking to tap into growing appetite from
companies for flexible workspace.
“We have
one eye on growth opportunities moving forward, but we’re taking our time
and trying to understand the market,” says Green. “We are
watching more than doing at the moment, but when we’re sure
that demand will significantly increase and we will be attracting
a wider market, then there will be a very exciting
opportunity to grow.”
He adds
that he anticipates forming more partnerships with landlords “who want access
to the flex sector, but don’t necessarily have the operational expertise”.
However,
he warns, while there is a sense of cautious optimism, there will still be
pain to come for some businesses. “Events like this tend to flush out the
companies that aren’t on solid foundations,” he elaborates. “Those that
are will make it through, but even then it is still painful. I’m an
optimist by nature, so I’m confident we’ll trade through this, but I think
everyone has some pain still to come this year.”
In short,
businesses are not out of the woods yet and even for those that are heading the
right way, there could be significant obstacles in their path.