It's no longer a secret that coworking and flexible serviced offices are the significant trends driving the office property market forward. Such centres are popping up everywhere in the Czech Republic.
According to statistics generated by CBRE, the number of leased square meters in coworking office buildings in Prague has risen by much as 150% since 2017 (from 25,000 sqm to 65,000 sqm). The share of coworking spaces leased in new lease office spaces grew from 2% in 2017 to 10% by mid-2019.
Our research reveals four main reasons that motivate companies to choose coworking: coping with an increase in short-term demand (48%), cost reduction (43%), testing of an alternative workplace (39%) and as part of efforts to attract new talent (28%). The last reason is becoming increasingly important with regards to the approach of the millennial generation to work and the long-term low unemployment rate. Over the past twelve months, its importance has grown by ten percentage points.
The reasons for the growth of this type of offices seem obvious. This trend is significant throughout Europe. The chart below shows the size of flexible offices and their market share in selected European cities.
Prague, where the market share is 2%, ranks among the average. On the contrary, the capital cities of the Netherlands and the United Kingdom stand out, accounting for 5% respectively 7%.
What we see in the UK results is the tendency, that organizations seek agile workplace strategies for their portfolios that put efficiency, people and experience at the heart of their real estate decision making.
This leads investors and landlords to re-evaluate their strategies. So what are the changes that are happening? Our researchers in the UK, who focused on the owners and landlords of traditional office space in the UK, identified how the UK landlord community are reacting to the evolving demands of occupiers. Here are some areas of key strategy changes:
Traditional landlords perceive this situation and must begin to experiment and modernize. And how to meet these changes? The path may be creating the Ultimate Agile Asset, which is depicted in the diagram below:
This confirms that we are facing changes not only in demands but also in offers on the office market. We can probably expect that it will be reflected also in the Czech real estate market.