"More operators opening more locations is resulting in greater innovation – it is pushing those creating and operating the workspaces to continuously elevate their proposition, whether that be through better design, tech, customer service or perks"
- Wybo Wijnbergen - infinitSpace
There is a fine line between market competition and saturation. A surfeit of anything is dangerous; it suggests an excess that cannot be sustained. However, in the flexible workspace industry, we are still a long way from the saturation point. Rather, at present, we are seeing that the increased competition in the flex market is having a positive effect on landlords, tenants and even the workspace operators.
Research contained in infinitSpace’s new flexible workspace guide highlights the boom in flexible workspace demand over the past five years. For example, in the UK, enquiries for flexible office space rose by 206% between 2019 and 2024.
To meet this demand, more landlords have been converting traditional offices into flexible office space operating models. Simultaneously, more operators have emerged to partner with landlords to manage this process and run the workspace from A to Z.
This begs the question: is the increase in flex operators, and flex workspaces more generally, a positive development for the office sector?
Driving up standards
Firstly, competition in any industry is always a powerful driver of standards; it keeps everyone on their toes and leaves no opportunity for organisations to rest on their laurels. That's certainly been evident in the world of flexible workspaces.
More operators opening more locations is resulting in greater innovation – it is pushing those creating and operating the workspaces to continuously elevate their proposition, whether that be through better design, tech, customer service or perks.
So, the quality of the end product for the members using flexible workspaces is, generally speaking, improving all the time. From solo entrepreneurs and startups to established SMEs and multinationals, the proliferation of flexible workspaces (global flexible workspace supply has expanded by 15% since 2019) means that every business ought to be able to find a workspace with the right terms, price point, facilities, services and, crucially, cultural fit.
But landlords are seeing benefits of their own, too.
Empowering landlords with choice
Having more operators to choose from is putting landlords in a position of strength. As the pool of flex providers increases, landlords can rest assured that operators will do everything in their power to remain at the forefront of the industry. This race to the top, in theory, should mean that all operators’ offerings will match the demands that the workforce of today – and tomorrow – expects.
Not only that, but the increased choice means that landlords can now select partners or operators that align precisely with what they and their assets require. For a time, landlords’ primary choice was handing the keys to their buildings over to large operators, leaving them with no power to say how the space would look or be run. Today, there are operators that operate under very different models; it becomes a collaboration rather than a marriage of convenience. A win-win model.
This is where white-label operators come in, giving landlords a chance to create their own brand of workspaces while being supported by a team experienced in establishing and managing the day-to-day operations of flexible workspaces.
We may start to see landlords implementing multiple flex options across their portfolios, either using different operators or different brands and spaces under the same operators. The rationale is that it would allow commercial landlords to cater to a more diverse range of potential members – a startup in a creative sector is likely to seek out a different flex space than a large financial services firm.
Consolidation: the fittest will survive
When markets become more competitive, it often leads to a period of consolidation. This, again, benefits the industry as a whole. A consolidation period could lead to the strongest, most reliable, and forward-thinking operators rising to the top – natural selection, but for flex spaces, if you like.
Only the most efficient, customer-focused operators will have the longevity to compete in a busy market. So, over time, it will foster stability and ensure flexible workspaces deliver what they promise.
It will be interesting to see if there is a move towards more consolidation in the flex market over the coming years. What we can say with more confidence is that demand for flexible workspaces is on the rise, and office landlords will continue to adapt their portfolios and their buildings accordingly.
As landlords make this shift, they will no doubt welcome the fact that there is more competition in today’s flex market. Indeed, this is to be embraced; it is a driver of standards and growth, and for landlords, it empowers them to find the perfect partner to create and operate the perfect workspace that fits the location of their office buildings. And as a result, improves financial stability and valuations.
