Global corporate occupier activity remained at a high level in the final quarter of 2017. Flex space providers accounted for about one-fifth of activity in London alone, while broad-based demand from corporates in the financial and technology sectors and the co-working industry underpinned activity in the U.S and Asia Pacific.

Corporate sentiment is improving as global economic growth creates expansion opportunities in both developed and emerging markets. Robust levels of occupier activity are expected to continue in 2018.



Co-working and shared office space on the rise globally

The burgeoning flex space and co-working market is transforming real estate across the world and is fast becoming an important part of wider corporate real estate (CRE) and portfolio strategies. SMEs, mobile and contingent workforces remain the backbone of flexible space operations, although medium and large companies have also begun to realise the potential of leveraging flexible space arrangements to better manage their liquid workforces, which is evident through some large-block corporate leasing.

Shared workspaces have grown at an incredible rate of 200% over the past five years. In global cities like London, New York and Chicago they are expanding at an annual rate of 20%, making co-working an institutional part of the market. Increasing demand for this type of space and rapid growth of the key providers is translating into investment, JV and acquisition activity in the sector.

Demand for flex space is projected to increase as corporates and large enterprises are looking to grow the flexible proportion of their portfolios to benefit from a range of the advantages that such flexibility can offer. A rising share of enterprise users is likely to continue to underpin the demand for flexible space over 2018 and beyond.

Talent and technology continue to drive CRE strategies

Competition for top talent has sparked renewed interest in firms’ location decisions, as many of the world’s largest technology and financial companies review their expansion strategies in a search for affordable but high-calibre talent. Companies are also leveraging workplaces as a key differentiator to attract and retain top talent. Our research shows that increasingly mobile and tech-enabled employees are demanding greater choice on when and where they work. In response, corporates are introducing a range of innovative workspaces and working arrangements offering more choices to improve employee performance and quality of life

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