Dose horribilis for the sector coworking. The hiring of flexible office spaces sank to a minimum last year after a trend of clear growth began in this new market since 2012 and in 2019 it marked a maximum. In 2020, tenant companies rented only 2,800 square meters in Madrid and 4,500 square meters in Barcelona, compared to 150,000 square meters in 2019 in these two cities, according to a report by the real estate consultancy JLL.
The crisis caused by the Covid-19 pandemic and teleworking has meant that neither companies nor freelancers had an interest in these spaces of variable size and flexible contracts.
“The hiring of flexible spaces has historically been linked to very specific profiles, among which entrepreneurs and startups stand out. Small companies that, in many cases, have been forced to reduce expenses such as hiring offices or, directly, have adapted to teleworking in line with the recommendations of the health authorities and mobility limitations, ”explains Ignacio Sobrino, JLL office director, regarding the collapse of the hiring of the coworking.
“To this is added another great profile, that of large companies that opted for this solution for specific projects and the integration of multidisciplinary and, sometimes, international teams that for the same reasons did not opt for these spaces during 2020”, he adds.
Segment coworking, known in the real estate sector as flexible spaces, has ceased to be the pretty girl of the office market and slows its large growth. In 2019, for example, 16% of all offices hired had been of the type flex and a year later it has sunk to 2%. The lengthening of the restrictions due to the pandemic and also the extension of the crisis during this year, predictably will also stop the hiring and opening of these spaces.
“Similar levels of hiring are expected in 2020, recovering progressively as the economy advances and the population is immunized,” says Sobrino. “It is still too early to say how the market will behave in the short term. However, flexible spaces continue to be very attractive for companies of different sizes that perceive this model as a very attractive alternative due to its benefits in contractual terms and in terms of conciliation. For this reason, in the medium term, there is a breeding ground for demand to increase, mainly in the large markets and in the provincial capitals ”, he adds.
“However, the activity is directly linked to the demand for flexible spaces, so investment and development activity would be conditioned by a reactivation of hiring,” says the head of JLL, who advances that new openings are expected in cities like Valencia, Alicante, Malaga and Seville.
Regarding operators, the market continues to be led by IWG (with the Regus and Spaces brands) both in Madrid and in Barcelona (see graph). In the capital, they are followed by the American giant WeWork and Utopicus (Inmobiliaria Colonial).
The market is already beginning to appreciate the presence of the large Socimis, which entered the sector with their own brands. The Colonial brand is gaining ground both in Madrid (with eight centers) and in Barcelona (five centers). In the capital, Merlin Properties, called Loom, already has seven spaces in Madrid and two in Barcelona.
“In 2020 we could see how large owners increased their market share in Madrid and Barcelona, as in the cases of Loom or Utopicus, Colonial and Merlin,” highlights Sobrino.