88% of the UK-based flexible office space operators feel confident about the next 12 months, according to a recent survey by Workthere, an advisory division of Savills. This puts them second in Europe, just behind the Netherlands, and well ahead of operators in the USA where only 61% of respondents had a confident outlook for the coming year.
When the first Workthere survey in this series was carried out in May, operators in the USA had the most confident outlook, well above that of their peers in Asia and Europe. But as infection rate peaks have moved from East to West, confidence rates have risen and fallen accordingly.
In the UK, the 88% expressing confidence was slightly higher than the 85% who felt confident in an earlier survey in June.
This positive attitude might be considered surprising, given the reluctance of UK workers to return to their offices. According to the survey, UK flexible offices were filled to just 23% of capacity in mid-July, despite government pleas for everyone to get back to work. This compares to 55% capacity in Germany and 57% in the Netherlands.
In addition, 35% of “members” (companies or sole traders) taking leases in UK flexible office space requested rent relief in July, second only in Europe to 36% in Spain, and not far behind the USA on 39%. This number was significantly higher than the 9% and 8% of members in the Netherlands and Germany seeking relief and higher than the global average of 27%.
The Workthere data also showed that 19% of UK flexible office members had not renewed their contracts. This is the highest nonrenewal rate in Europe, although not as bad as the 28% nonrenewal rate seen in the USA.
So why are the operators of UK flex offices feeling so confident about the future relative to their European peers?
Despite all the challenges, UK operators expect that 71% of their space will be occupied by the end of August. Only the Netherlands at 74%, expects a higher rate in Europe.
And if they look across the Atlantic, where American operators are looking at a 49% occupancy by the end of August, they know that things could be much worse.