Whether it's due to the uncertainty that has gripped the global economy so far this year or because new work habits are largely consolidating after two years influenced by the pandemic, the truth is that business corporations are approaching office management very differently to adapt to new times.
Flexibility is the key term in this entire process. In working hours, schedules, in-person presence and, consequently, in the workspace. This not only internally modifies corporate buildings but also the real estate offer, with the increase of the so-called flex market, which groups coworking spaces and diverse work areas that can be leased under less rigid conditions than traditional offices.
So much so that, once the economy has returned to a certain normality, companies and self-employed professionals have reactivated demand in this real estate segment, especially in large cities like Barcelona, according to the latest report on the flex market in Europe, periodically prepared by CBRE, an international firm in real estate consulting and services.
The Catalan capital registered in the first quarter of this year a contracting of flexible workspace of up to 7,155 square meters, a figure that positions it as the third city in Europe in terms of transaction volume.
The level of space reservation places Barcelona behind Madrid ---where about 9,500 square meters were contracted between January and March--- and far behind the most demanded capital, Paris, where the reservation amounted to 22,200 square meters.
However, Barcelona records a more significant relative increase since the volume of square meters leased represents 34.55% of the total contracted throughout the entire previous year, 20,706 square meters. "A large part of last year's expansion has been due to the growth of the Tech Barcelona association, which has been responsible for almost half of the flexible space that has been occupied (take-up)," according to Jesse Derkx, EMEA Flex Brokerage Lead CBRE, told The New Barcelona Post. For its part, in Madrid, last year less than 19,000 square meters were reserved, and in Paris, it was just over 61,000.
"Barcelona and Madrid are now among the cities where we detect the greatest expansion," Derkx continues. The expert explains that, while the top-3 has always been for more consolidated cities like London, Amsterdam, and Paris, recently the tables have turned and, in addition to Barcelona and Madrid, there has also been a very strong increase in cities like Warsaw, Rotterdam, and Brussels.
The CBRE report places contracting levels so far this year at similar levels to those of 2017 and 2018, but far from the high demand recorded in 2019. However, sector forecasts are favorable: "We believe we will see high levels of such transactions again. Flex centers in Barcelona and Madrid have an average occupancy of 82% and more sites are transacted each quarter than the previous quarter. Almost all operators have expansion plans, as demonstrated by the fact that from CBRE we have already assisted with growth plans in several parts of Spain this year," Derkx specifies.
"Much of last year's expansion has been due to the growth of the Tech Barcelona association," says real estate expert Jesse DerkxDemand also shows the interest and adaptation of Barcelona's labor market to new trends.The real estate flex segment is better positioned in the city than in other European capitals and has a penetration in the sector as a whole of 2.9%,while in Madrid it is 1.7% and in Paris 1.2%. In fact, the Catalan capital is approaching the averages of more evolved cities such as Amsterdam ---where adaptable spaces, often with shared services, represent 4.6%--- or London ---with 5.9%--- and Brussels ---with 3.3%---.
Taking these percentages into account, it is clear for the real estate consultant that Barcelona and Madrid have a lot of room for growth considering the penetration in more mature markets such as London and Amsterdam, but Derkx points out that "although proportionally there is more flex offer in Barcelona, in absolute numbers Madrid is ahead".
New business models and lower costs
Among the reasons for the success of adapting to the new labor market, CBRE experts point to the emergence of synergies between operators and owners, new business models, or the use of flexible spaces as a strategy for companies to enter new markets.
The consultant's report determines that flexibility in the workplace, in its broadest sense, continues to be understood as one of the main opportunities for companies. According to its EMEA Office Occupier Sentiment Survey, 57% of office tenants believe that their work areas will have between 11% and 50% flex space in the next two years.
This is because tenants see this formula as a way to reduce the cost of real estate rents, says 39% of those surveyed by the consultant. Hence, office building design is increasingly incorporating new requirements, such as shared spaces and services for different companies.
57% of office tenants believe that their work areas will have between 11% and 50% flex space in the next two yearsThe latest CBRE report states that in the first quarter of this year, the rents paid in Barcelona for a coworkingor a rental workspace are low, compared to those in the rest of European cities. Thus, taking as a reference the monthly price for renting a desk ---a standard measure for this segment of real estate activity---, in the Catalan capital between 370 euros and 530 euros have been paid, while in Madrid the range is somewhat larger, from 400 to 650 euros.
Jesse Derkx states that both cities have had a certain price war to refill flexible workspaces after COVID and "we are seeing that prices have recovered, but in Madrid the price per desk has always been somewhat higher". This has to do, according to this expert, with the prime rent in Madrid, which is also higher and, therefore, "operating a flex space in Madrid is always more expensive than in Barcelona."
In comparison, the most expensive city continues to be London, whose rents range between 800 and 1,300 euros; Paris, with prices from 700 to 1000 euros; and Milan, Munich and Amsterdam also surpass the Spanish capitals.
In line with global office demand
Real estate consultants note, however, that there are also companies that opt for traditional office rental, which allows them to have their own workspaces, although they are often designed based on formulas such as hot desking. According to the consultant BNP Paribas Real Estate, the prospects for the coming months of the office market in Barcelona and its metropolitan area will continue their positive rhythm with marked dynamism.
With data from BNP Paribas Real Estate, office contracting in Barcelona in 2022 could be at levels between 330,000 square meters and 350,000 square meters, which would mean an annual increase of approximately 6%.
In the second quarter of this year alone, the recorded contracting figure in Barcelona amounted to 84,312 euros and the average contracted area was 1,198 square meters, with 22@ being the area that absorbed almost half of the contracting, with 40% of the total operations signed.
In the second quarter of this year alone, the recorded contracting figure in Barcelona amounted to 84,312 eurosFor the remainder of 2022, forecasts indicate thataround 280,000 square meters of offices will be delivered, 85% in the 22@ area and the rest in the Zona Franca surroundings, the two urban areas in full real estate development of the city.
In addition, according to the consultancy, several rehabilitated buildings are expected to be delivered in the second half of the year in the city center, which will incorporate real estate offerings with the latest qualities and sustainability certifications.