MatchOffice Survey Report


[PDF]MatchOffice Survey Report - Rackcdn.comhttps://9b153781e2511025ed31-fe9bb3d670a25d1e8b903bc1d2a3edd1.ssl.cf3.rackc...

0 downloads 150 Views 13MB Size

SURVEY REPORT 2018

45 countries 979 workspaces Following a good tradition, MatchOffice presents a comprehensive industry survey. In 2018, 979 flexible workspaces have responded to our questions. Discover how the industry has evolved over the last year and how providers see the future.

Table of Contents Introduction ..................................................................................... 3 Europe ................................................................................................ 4 Belgium .............................................................................................. 9 Denmark ......................................................................................... 14 France ............................................................................................ 19 Germany .................................................................................... 24 Italy .......................................................................................... 29 The Netherlands ............................................................ 34 Spain ............................................................................ 39 Sweden ............................................................... 44 Asia ............................................................. 49 North America ............................... 52

2

The most recent information on the flexible workspace industry:

The MatchOffice Survey Report 2018 Share on Facebook

Share on LinkedIn

Share on Twitter

For the fourth consecutive year, we have invited our partners from all over the world to participate in our industry survey. In the report, you can find year-on-year statistics on office occupancy, achieved and expected price level and providers’ outlook on business. In 2018, we acknowledge that the industry has fulfilled providers’ aspirations for growth, and, like in previous years, has shown its great potential. We can confidently say: the best is yet to come. We are extremely grateful to all our partners who kindly agreed to participate in our survey and share valuable information on this year’s business results and plans. It is a genuine pleasure for us to present MatchOffice industry survey 2018. I sincerely hope it will fulfill its purpose of providing you with the most recent industry insights.

Jakob Dalhoff CEO, MatchOffice Share on Facebook

Share on LinkedIn

Share on Twitter

Europe A growing number of workspaces experience occupancy rates above 90%

2018 has started successfully for the European market, and most positive trends that we could observe in 2016 have been further developing. The proportion of offices that are more than 90% occupied is rising in many European countries, with some workspaces very likely to hit record levels soon. Nevertheless, the overall occupancy growth has slightly slowed down compared to last year as it is getting progressively more difficult to maintain the fast pace. With all the positivity and impressive achievements, it is not surprising that over half of all providers expect higher occupancy, and over a third - higher rental rates soon. However, now the majority have the same prices as last year, which might be another way to stay competitive and retain many clients. Stability in contract lengths, achieved by over 70% of providers, has been another marked tendency since 2016. It seems the industry has established a reasonable standard, which is suitable both for providers and tenants. 70% of the respondents have an optimistic outlook for the industry, and the obtained survey results confirm our diagnosis for the European market: healthy and thriving. Furthermore, it has a good growthpotential as many providers are expanding their business to new cities and countries - Jakob Dahlhoff says. 4

EUROPE

1

2/7

Average office occupancy 40.0% 30.5% 30.0%

33.9%

29.2%

17.6% 18.5%

20.0%

10.0%

32.2%

10.3%

8.0%

9.4% 10.4%

0.0% Under 60%

60% - 69%

70% - 79%

2017

80% - 89%

Over 90%

2018

The number of offices with occupancy under 60% has been decreasing for the second year in a row. Minor fluctuations can be also observed in four other bands with a positive 1.7%-points growth in that with 90% occupancy.

2

Occupancy compared to last year 40.0% 33.8%

36.6%

35.0% 35.1%

30.0%

18.0% 15.2%

20.0%

10.0%

7.1% 3.3%

3.2% 2.4%

0.0%

0.0% Much lower

2.9%

Lower 2017

The Same

Higher

Much higher Don't know 2018

17.6% of all providers have lower or much lower occupancy compared to last year - a positive 3.6%-points change. We can also observe an increase in the same occupancy band against 2017 - a 2.8%-points, whereas 3.8%-points fewer respondents have reported much higher occupancy. INDUSTRY REPORT

5

EUROPE

3

4/7

Occupancy expectation in 6 months 50.0%

45.8% 42.4% 38.6%

40.0%

37.2%

30.0% 20.0% 9.0% 7.7%

10.0%

6.8% 6.0% 2.3% 1.2%

1.0% 2.1% 0.0% Much lower

Lower

The same

Higher

2017

Much higher Don't know 2018

In 2018, more providers expect higher occupancy - 3.4%-points increase. All in all, over half of all respondents aspire to let more space in the future with only one-tenth believing they will have fewer tenants.

4

Achieved prices for office contracts or workstations compared to last year 60.0%

54.6% 53.9%

50.0% 40.0% 31.5% 30.0%

25.5%

20.0%

14.4%

10.0% 0.0%

11.0%

2.0% 0.3% Much lower

1.3% 0.9% Lower 2017

The same

Higher

2.3% 0.9%

Much higher Don't know 2018

The popularity of workspaces is obvious as almost one-third of them have higher prices - a noticeable 6%-points increase on last year’s figure. Like in 2016 and 2017, over half of providers maintain the same prices to stay competitive. INDUSTRY REPORT

6

EUROPE

5

6/7

Expected price level in 6 months 70.0% 59.2% 54.7%

60.0% 50.0% 40.0%

32.0% 29.1%

30.0% 20.0% 7.2%

10.0% 0.0%

11.2% 1.3% 0.9%

1.0% 0.3% Much lower

Lower

The same

Higher

2017

2.3% 0.9%

Much higher Don't know 2018

We can see a 4.5%-points decline in the number of providers predicting the same prices in 6 months. Higher price expectations are a tendency continued from 2016 - an appreciable 8.6%-points rise.

6

Initial contract length compared to last year 80.0%

72.1%

72.7%

70.0% 60.0% 50.0% 40.0% 30.0% 20.0%

12.8%

13.3%

11.5%

13.6%

10.0%

3.6%

0.0% Shorter

The same 2017

Longer

0.3%

Don't know

2018

The graph shows another marked tendency for stable contract length since 2016. Despite slight shifts in shorter and longer contracts against last year, contract length might not be a competitive factor as it has become standard in the industry. INDUSTRY REPORT

7

EUROPE

7

7/7

General outlook 60.0% 51.8% 51.8% 50.0% 40.0% 30.0%

25.2% 19.7%

20.0% 8.5%

10.0% 0.0%

17.4% 17.3%

0.7% 0.0% Very negative

3.9% Negative

2017

2.0% 1.8% Neutral

Positive

Very positive Don't know

2018

In 2018, we can see an inspiring 4.6%-points fall in respondents with a negative attitude, whereas the number of neutral has also gone up. Almost 70% feel positive or very positive about the industry prospects - the same sentiments as last year.

8

Belgium Like in two previous years, the number of workspaces with very high occupancy has risen. Compared to 2017, some providers have improved their occupancy performance, and over half of them predict that it will further grow. Most respondents have the same prices and contract length as last year. Two-thirds of them see the future positively.

BELGIUM

1

2/7

Average office occupancy 40.0% 30.7% 30.2%

30.0%

20.0%

15.7% 12.9%

10.0%

15.6% 10.3%

30.7% 27.7%

17.6%

8.6%

0.0% Under 60%

60% - 69%

70% - 79%

80% - 89%

2017

Over 90%

2018

The number of flexible workspaces with occupancy under 60% and 69% has been decreasing since 2016. Over 30% of the workspaces are almost fully occupied - 7.5%-points increase compared to 2016, which shows that top locations have become even more popular.

2

Occupancy compared to last year 50.0%

44.2%

40.0%

34.5% 34.4%

38.0%

30.0% 17.4%

20.0% 13.8%

8.7%

10.0%

5.0%

2.5% 1.5%

0.0% 0.0%

0.0% Much lower

Lower 2017

The Same

Higher

Much higher Don't know 2018

Over one-third of the respondents have the same occupancy as last year. Despite the year-on-year decrease in higher occupancy band, 46.7% report having rented out more or much more spaces. These figures show that the Belgian market is developing steadily and resembles the European. INDUSTRY REPORT

10

BELGIUM

3

4/7

Occupancy expectation in 6 months 60.0%

52.5%

50.0%

43.2% 38.8% 34.8%

40.0% 30.0% 20.0% 10.0% 0.0%

8.2% 8.7% 2.3%

7.5%

0.0%

Much lower

Lower

The same

Higher

2017

4.0%

0.0% 0.0%

Much higher Don't know 2018

No much lower occupancy expectations together with a marked shift from the same to higher testify to providers’ growing confidence about the future. Only 8.7% of them predict fewer tentants.

4

Achieved prices for office contracts or workstations compared to last year 80.0% 65.5% 66.9%

70.0% 60.0% 50.0% 40.0% 30.0% 17.4% 15.4%

20.0% 10.0% 0.0%

17.1% 15.6%

0.0% 0.0% Much lower

0.0% 0.0% Lower 2017

The same

Higher

0.0% 2.1%

Much higher Don't know 2018

Almost 67% of all providers in Belgium maintain the same level of prices as last year. Interestingly, there have not been any drastic price changes compared to 2017. Furthermore, the proportions of those having both lower and higher prices have also slightly decreased. INDUSTRY REPORT

11

BELGIUM

5

6/7

Expected price level in 6 months 90.0% 76.6% 69.0%

80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

13.8%

17.2% 12.7%

9.5%

0.0% 0.0% Much lower

0.0% 0.0% Lower

The same

Higher

2017

0.0% 1.2%

Much higher Don't know 2018

This graph strongly resembles the one showing the achieved prices. Only 15.6% of the respondents have experienced an increase in prices. Unsurprisingly, even more expect the rates to remain the same in 6 months a noticeable 7.6%-points growth on last year’s figure.

6

Initial contract length compared to last year 75.9%

80.0%

72.3%

70.0% 60.0% 50.0% 40.0% 30.0% 20.0%

15.5%

17.2% 8.6%

10.0%

10.5% 0.0%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

Approximately two-thirds of all flexible workspaces have the same length of contract as in 2017, whereas the number of both shorter and longer contracts has slightly increased. Overall, the situation looks stable.

INDUSTRY REPORT

12

BELGIUM

7

6/7

General outlook

56.7% 56.5%

60.0% 50.0% 40.0% 30.0%

24.5%

26.2%

20.0% 10.3%

10.0% 0.0%

8.5% 9.6%

6.6%

0.0% 1.1%

0.0% 0.0% Very negative

Negative 2017

Neutral

Positive

Very positive Don't know 2018

The number of providers with a positive outlook is virtually unchanged, with a 1.1%-points increase in those who are highly optimistic about the future. The decline in the negative band is also heartening.

13

Denmark Like in Belgium, there has been an increase in the highest occupancy band, whereas the opposite one has also doubled. With many new flexible workspaces in big cities like Aarhus and Copenhagen, the market is becoming even more competitive. However, the buoyant demand in the Danish market allows providers to increase prices without losing tenants.

DENMARK

1

2/7

Average office occupancy 40.0%

36.8%

35.8%

33.6% 29.9%

30.0% 19.6%

20.0%

10.0%

16.3% 10.2%

9.7%

5.0%

4.1%

0.0% Under 60%

60% - 69%

70% - 79%

80% - 89%

2017

Over 90%

2018

The market has become even more competitive in Denmark in 2018, with a 5.9%-points increase in flexible workspaces with the highest occupancy and the doubling of those that are less than 60% occupied.

2

Occupancy compared to last year 50.0% 40.8% 40.0% 32.2%

39.1% 34.7%

30.0% 20.0%

16.7%

14.3%

11.2%

10.0%

7.1% 0.8% 2.0%

0.0% 1.1%

0.0% Much lower

Lower 2017

The Same

Higher

Much higher Don't know 2018

The market shows even more stability: 40.8% of all respondents have the same occupancy - an 8.6%-points increase against 2017. Naturally, there are fewer workspaces with lower, higher and much higher occupancy, and only 1.2% have lost a big share of tenants. INDUSTRY REPORT

15

DENMARK

3

4/7

Occupancy expectation in 6 months 60.0% 50.9% 50.0%

43.0% 35.1% 36.7%

40.0% 30.0% 20.0% 9.8%

10.0% 0.0%

13.4% 4.2%

6.1% 0.0% 0.8%

0.0% 0.0% Much lower

Lower

The same

Higher

2017

Much higher Don't know 2018

The situation is still very healthy in Denmark. Almost half of all respondents expect the occupancy to be higher or even much higher in the months to come, whereas about a third believe they will have the same occupancy performance.

4

Achieved prices for office contracts or workstations compared to last year 70.0%

66.4% 57.1%

60.0% 50.0% 40.0%

30.6% 26.0%

30.0% 20.0% 10.0% 0.0%

5.4%

10.2% 2.2%

0.0% 0.0% Much lower

Lower 2017

The same

Higher

0.0%

0.0% 2.0%

Much higher Don't know 2018

The graph shows that over half of all providers have the same prices as in 2017- a 9.3%-points decrease since last year. Naturally, we can observe some growth in higher and lower prices bands, which again testifies to the overall market balance. INDUSTRY REPORT

16

DENMARK

5

6/7

Expected price level in 6 months 90.0%

81.4% 74.1%

80.0% 70.0% 60.0% 50.0% 40.0% 30.0%

15.0% 10.2%

20.0% 10.0% 0.0%

8.5% 6.6%

2.4% 1.8%

0.0% 0.0% Much lower

Lower

The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

The vast majority of the respondents do not expect the prices to change. The number of providers predicting that the rent price will rise or fall has decreased by 4.8 and 1.9%-points respectively. Interestingly, 1.8% believe it will soar shortly, and none - that it is likely to nosedive.

6

Initial contract length compared to last year 100.0%

89.8%

90.0%

81.2%

80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%

9.8%

9.0%

4.1%

6.1%

0.0% Shorter

The same 2017

Longer

0.0%

0.0%

Don't know

2018

Almost 90% of all respondents have the same length of contracts as last year. It seems that tenants have decided on the most convenient format and stuck to it consistently.

INDUSTRY REPORT

17

DENMARK

7

7/7

General outlook

50.0% 41.5% 40.0%

36.1%

35.4%

28.4%

30.0%

25.3% 19.9%

20.0% 7.4%

10.0% 0.0%

0.0% 0.8% Very negative

3.2% Negative 2017

0.0% Neutral

Positive

2.0%

Very positive Don't know 2018

Fewer respondents preserve neutrality this year - a 7.7%-points decrease against 2017. It is inspiring to see that over 60% of providers have a positive outlook or even believe the flexible workspace industry is really auspicious in Denmark.

18

France A quarter of all workspaces that participated in our survey are almost fully occupied. Over 40% have reported the same occupancy as last year, with nearly equal proportions of those who have either more or fewer tenants. Over 20% of providers have negative occupancy expectations. These results might account for virtually the same proportion of those having pessimistic sentiments.

FRANCE

1

2/7

Average office occupancy 30.0% 25.4% 23.3% 19.4% 20.0%

20.0% 12.0%

17.9%

19.9%

26.9%

21.8%

13.4%

10.0%

0.0% Under 60%

60% - 69%

70% - 79%

80% - 89%

2017

Over 90%

2018

Almost half of all respondents report occupancy higher than 80% - a 3.4%-points increase against last year. The most significant change can be observed in workspaces with 70-79% occupancy - a 5.4%-points reduction, while the number of those with lower occupancy has risen, too.

2

Occupancy compared to last year 50.0% 40.2% 41.2%

40.0%

27.7%

30.0% 20.0% 10.0%

17.1%

29.7%

19.0%

13.3% 10.1% 0.0% 0.0%

0.0% Much lower

Lower 2017

The Same

Higher

1.7%

0.0%

Much higher Don't know 2018

Like in 2017, about 40% of providers maintain the status quo. Almost 30% have strengthened their competitive position and reported higher occupancy, whereas the same proportion is faced with an opposite situation.

INDUSTRY REPORT

20

FRANCE

3

4/7

Occupancy expectation in 6 months 40.0%

37.1% 33.3%

30.0%

25.6% 26.4%

20.0% 14.4%

13.7% 12.5% 9.1%

10.0%

11.1%

9.7% 4.8%

2.3%

0.0% Much lower

Lower

The same

Higher

2017

Much higher Don't know 2018

Like the previous graph, this one shows that the market is not homogenous in France. Over 40% of respondents have high occupancy aspirations, while the rest are not so optimistic.

4

Achieved prices for office contracts or workstations compared to last year 80.0% 67.1%

70.0%

62.0%

60.0% 50.0% 40.0% 30.0%

24.6%

20.0% 10.0% 0.0%

17.3%

11.2% 12.7% 4.4%

0.0%

Much lower

0.0% 0.0% Lower 2017

The same

Higher

0.0% 0.7%

Much higher Don't know 2018

There is a noticeable shift from the same to higher prices year-on-year. We can assume that providers who have higher occupancy have also increased rental rates. However, more than half have not changed their pricing policy since 2017. INDUSTRY REPORT

21

FRANCE

5

6/7

Expected price level in 6 months 80.0%

74.6%

70.0%

64.1%

60.0% 50.0% 40.0% 30.0% 20.0%

16.3%

12.5%

14.7% 7.1%

10.0% 0.0%

10.7%

0.0% Much lower

0.0% 0.0% Lower

The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

Compared to 2017, we can observe 10.5%-points growth in providers predicting the same prices in six months. However, the most substantial change is that none of the respondents expect much lower prices in the future. Moreover, none see any grounds for rental rates to skyrocket.

6

Initial contract length compared to last year 60.0% 48.8%

50.0% 40.0% 30.0%

44.2% 36.4% 27.7% 23.5% 19.4%

20.0% 10.0%

0.0%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

This year, fewer providers have signed shorter contracts - a 7.7% decrease against 2017. Interestingly, the upward trend in the longer contracts band can be observed for the second year in a row, which might be an encouraging sign. INDUSTRY REPORT

22

FRANCE

7

7/7

General outlook 60.0% 51.1% 50.0% 41.2% 40.0% 30.0% 20.0% 10.0% 0.0%

21.7%20.8%

19.3% 17.4%

11.2%

8.5% 0.0% Very negative

8.8% 0.0% 0.0%

Negative 2017

Neutral

Positive

Very positive Don't know 2018

Negativity in the French flexible workspace industry has subsided in 2018. However, still almost one-fifth of respondents have a pessimistic outlook, which might be explained by the downward trend in occupancy. Over half of all providers are neutral about the industry prospects.

23

Germany With almost half of workspaces being over 90% occupied, the German market remain the industry leader in continental Europe, followed closely by the Swedish. Furthermore, nearly 30% of providers expect even better results in terms of occupancy. The same refers to profitability forecasts based on the already achieved prices. Success is in the air, and more than 70% of the respondents believe the future holds long-term prosperity.

GERMANY

1

2/7

Average office occupancy 60.0% 50.0% 48.8%

50.0% 40.0% 30.6% 30.1%

30.0% 20.0% 10.0%

13.2% 8.5% 6.9%

4.2%

6.7% 1.0%

0.0% Under 60 %

60 % - 69 %

70 % - 79 %

80 % - 89 %

2017

Over 90 %

2018

Very high occupancy achieved by almost 80% providers is a trend continued from 2016. About half of all offices are close to fully occupied, which is far above average compared to the rest of Europe. The two lower occupancy bands have also diminished slightly.

2

Occupancy compared to last year 60.0% 51.6% 47.3%

50.0% 40.0%

31.3%

33.2%

30.0% 20.0% 11.2%

13.9%

10.0% 0.0%

2.8% 2.1%

0.0% 1.0% Much lower

Lower 2017

The Same

Higher

3.1% 2.5%

Much higher Don't know 2018

Predictably, the German market is currently developing at a steady pace. Just under half of all respondents have reported the same occupancy as last year, while more than 30% have experienced growth. The year-on-year increase in those having fewer tenants is only 2.7%-points against 2017. INDUSTRY REPORT

25

GERMANY

3

4/7

Occupancy expectation in 6 months 70.0% 59.4% 56.1%

60.0% 50.0% 40.0%

33.2% 28.1%

30.0% 20.0% 10.0% 0.0%

0.0% 0.0% Much lower

6.3% 4.4%

3.1% 3.4% Lower

The same

Higher

2017

3.1% 2.9%

Much higher Don't know 2018

The 2018 data closely resemble last year’s results, with a slight shift from the same to higher occupancy expectations. However, it is getting more difficult for providers to further improve their occupancy due to natural limits. Supposedly, it could lead to increased prices.

4

Achieved prices for office contracts or workstations compared to last year 70.0%

62.3%

60.0%

55.2%

50.0% 37.9%

40.0%

29.9%

30.0% 20.0% 5.8% 6.9%

10.0% 0.0%

2.0% 0.0%

0.0% 0.0% Much lower

Lower 2017

The same

Higher

0.0% 0.0%

Much higher Don't know 2018

Many workspaces have very high occupancy, so it is not surprising that there is 8%-points growth in the higher prices bracket, although over half of providers have the same pricing policy.

INDUSTRY REPORT

26

GERMANY

5

6/7

Expected price level in 6 months 80.0% 70.0%

63.1%

66.7%

60.0% 50.0% 40.0%

30.6%

30.0%

27.6%

20.0% 10.0% 0.0%

6.3% 0.0% 0.0% Much lower

2.3%

Lower

0.0% 0.0% The same

Higher

2017

0.0%

3.4%

Much higher Don't know 2018

Two out of three respondents believe they will be able to charge the same price for their services in 6 months from now. In line with the occupancy results, 27.6% are confident that they will have increased rates in the near future compared to the current level.

6

Initial contract length compared to last year 80.0%

76.1% 68.2%

70.0% 60.0% 50.0% 40.0% 30.0% 20.0%

12.5%

16.2% 11.4%

10.0%

15.6% 0.0%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

Almost two-thirds of providers have signed contracts of the same length as before. It appears that current standards are suitable for tenants, too. The rest are divided into two almost equal groups with shorter and longer contracts a slight increase against 2017. INDUSTRY REPORT

27

GERMANY

7

7/7

General outlook 80.0% 67.7%

70.0% 60.0%

49.8%

50.0% 40.0% 26.9% 21.9%

30.0%

16.8%

20.0% 10.0% 0.0%

0.0% 0.0% Very negative

7.0%

3.4% 3.4% Negative 2017

Neutral

Positive

3.1%

0.0%

Very positive Don't know 2018

This year’s growth in positive attitudes can be attributed to the impressive market results of the previous periods. One-fifth of all providers are neutral in their estimates of the industry prospects, whereas the number of very optimistic has fallen by 9.8%-points.

28

Italy Like in other European countries, the average office occupancy has noticeably grown in Italy. With overall year-on-year stability in prices, we can observe a substantial rise in shorter contracts. Obviously, smaller companies and startups prefer short-term commitment to adjust workspaces to changing business needs quickly.

ITALY

1

2/7

Average office occupancy 40.0% 31.8% 28.0%

30.0%

27.8% 22.8%

18.8%

20.0% 14.3% 10.0%

16.1%

13.6%

18.2%

8.6%

0.0% Under 60 %

60 % - 69 %

70 % - 79 %

80 % - 89 %

2017

Over 90 %

2018

The market is picking up in Italy - the conclusion drawn on the basis of improvement in the two highest occupancy bands, with a simultaneous decline in the offices which are less than 69% occupied.

2

Occupancy compared to last year 50.0%

44.2% 38.8%

40.0%

36.7%

28.5%

30.0% 20.0%

15.3% 11.3%

12.0% 13.2% 10.0% 0.0%

0.0% 0.0%

0.0% 0.0% Much lower

Lower 2017

The Same

Higher

Much higher Don't know 2018

There is a negative skew in the data compared to 2017: fewer respondents have reported higher or much higher occupancy with a natural increase in the same occupancy bracket. It suggests market stability and good growth prospects, especially combined with the results shown above. INDUSTRY REPORT

30

ITALY

3

4/7

Occupancy expectation in 6 months 47.6% 45.6%

50.0%

45.3% 38.7%

40.0% 30.0% 20.0% 8.1% 9.1%

10.0% 0.0%

5.6%

0.0% 0.0% Much lower

0.0% Lower

The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

Interestingly, the proportions of providers expecting the same or higher occupancy have equaled this year. The fact that only one-tenth of the respondents expect occupancy to drop in six months is another proof of the healthy Italian market.

4

Achieved prices for office contracts or workstations compared to last year 80.0%

72.2% 72.7%

70.0% 60.0% 50.0% 40.0% 30.0% 18.2% 12.1%

20.0% 10.0% 0.0%

15.7% 9.1%

0.0% 0.0% Much lower

0.0% 0.0% Lower 2017

The same

Higher

0.0% 0.0%

Much higher Don't know 2018

For the third consecutive year, there have not been any large fluctuations in prices. About two-thirds of providers have the same rates as in 2017. It seems that many flexible workspaces attract loyal clients, for whom they do not change their pricing policy. INDUSTRY REPORT

31

ITALY

5

6/7

Expected price level in 6 months 100.0% 86.9%

90.0%

75.5%

80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

11.8% 0.0% 0.0% Much lower

12.7%

5.6%

Lower

7.5% 0.0% 0.0%

The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

The data naturally follow those from the previous graph: an overwhelming majority of providers do not plan to increase prices in the next six months. Predictably, none expect the rates to change drastically.

6

Initial contract length compared to last year 80.0% 68.7%

70.0% 60.0% 50.0%

45.5%

40.0%

31.8%

30.0% 17.7%

20.0% 10.0%

22.7%

8.2%

5.4%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

This year, there is a substantial rise in shorter contracts - 23.6%-points, which might be explained by more tenants seeking flexibility. About onefifth of all providers have reported longer contracts.

INDUSTRY REPORT

32

ITALY

7

7/7

General outlook 70.0%

64.6% 59.1%

60.0% 50.0% 40.0% 30.0%

25.3% 21.7%

20.0% 9.8%

10.0% 0.0%

9.1%

4.8%

3.9%

0.0% 0.0% Very negative

Negative 2017

Neutral

Positive

0.0% 1.7%

Very positive Don't know 2018

It is not surprising that the achieved results encourage optimism in over 50% of providers. There is also a 5.2%-points rise in the very positive attitude band, whereas a quarter of all respondents are neutral.

33

The

Netherlands The double amount of providers with a positive outlook and no negativity characterizes the Dutch market very well this year. Over half off all respondents have more tenants than in 2017. However, we can see a growing disparity between flexible workspaces with the lowest and the highest occupancy. New workspaces might need more time to win clients and improve their performance.

THE NETHERLANDS

1

2/7

Average office occupancy 40.0%

36.8% 29.8%

30.0%

29.4% 23.5%

22.7% 17.6%

20.0% 12.6%

11.8% 10.0%

7.7%

8.1%

Under 60%

60% - 69%

0.0% 70% - 79%

80% - 89%

2017

Over 90%

2018

The highest occupancy bracket has increased by 11.8%-points this year. However, the number of offices with lower occupancy has also grown, which shows that the competitive gap has widened.

2

Occupancy compared to last year 50.0%

47.1%

40.0%

35.3% 31.2%

34.8%

30.0% 22.2% 20.0% 9.9%

10.0% 3.2% 0.0%

4.5%

6.8%

4.1%

0.0%

Much lower

Lower 2017

The Same

Higher

0.9%

Much higher Don't know 2018

There is a distinct upsurge in the popularity of flexible workspaces in this market as almost half of providers have more tenants than last year. Furthermore, the graph shows a twofold decrease in those with lower occupancy. INDUSTRY REPORT

35

THE NETHERLANDS

3

4/7

Occupancy expectation in 6 months 50.0%

45.5% 46.8% 39.8% 37.6%

40.0% 30.0% 20.0% 10.0% 0.0%

0.0%

2.0%

Much lower

5.9%

4.7%

Lower

4.5% 5.9%

The same

Higher

2017

5.5% 1.8%

Much higher Don't know 2018

Almost half of the respondents have expressed confidence about the occupancy growth in six months, which is virtually unchanged from 2017. It resembles the situation in Italy and Belgium and follows the general European trend.

4

Achieved prices for office contracts or workstations compared to last year 70.0% 58.8%

60.0% 51.5% 50.0% 40.0%

30.3% 25.3%

30.0% 18.1%

20.0%

10.9% 10.0% 0.0%

5.1% 0.0% 0.0% Much lower

0.0% 0.0% Lower 2017

The same

Higher

0.0%

Much higher Don't know 2018

This graph convincingly demonstrates a shift from lower towards the same and higher prices compared to 2017. Unsurprisingly, none of the respondents have reported much lower or much higher rates for the third consecutive year. INDUSTRY REPORT

36

THE NETHERLANDS

5

6/7

Expected price level in 6 months 70.0% 59.0% 52.9%

60.0% 50.0%

39.1%

40.0%

31.8%

30.0% 20.0% 10.0% 0.0%

5.4%

8.0%

0.0% 0.0% Much lower

0.0% 0.0% Lower

The same

Higher

2017

3.8%

0.0%

Much higher Don't know 2018

Overall, price expectations roughly coincide with the achieved level, like in other European countries. The existing market success is predicted to bring higher profit to 39.1% of providers.

6

Initial contract length compared to last year 80.0%

72.0% 70.6%

70.0% 60.0% 50.0% 40.0% 30.0% 20.0%

14.4%

17.6%

13.6%

11.8%

10.0% 0.0%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

Most flexible workspaces have signed contracts for the same period as last year. However, there is a small rise in the shorter contracts. Presumably, this trend will continue like in Italy as flexibility is valued.

INDUSTRY REPORT

37

THE NETHERLANDS

7

7/7

General outlook 60.0% 50.9% 50.0%

45.3%

40.0% 31.2%

27.3% 23.5%

30.0%

17.7%

20.0% 10.0% 0.0%

0.0% 0.0%

0.0% 0.0%

Very negative

Negative 2017

4.1% Neutral

Positive

0.0%

Very positive Don't know 2018

The optimism is well-grounded on the Dutch market. The almost doubling of providers who believe in the industry’s excellent prospects and the absence of negative sentiments are very inspiring.

38

Spain This year the market in Spain is following European trends: an increased number of workspaces with the highest occupancy, better results against last year, and high expectations. The prices and the contract length have remained almost unchanged, while more providers believe the industry has excellent growth prospects.

SPAIN

1

2/7

Average office occupancy 50.0% 40.3%

40.0%

37.0% 29.7%

30.0%

25.4%

20.0%

16.4%

18.5%

12.1% 11.1% 10.0%

5.8%

3.7%

0.0% Under 60%

60% - 69%

70% - 79%

80% - 89%

2017

Over 90%

2018

It seems that European occupancy trends have reached the Spanish market this year: the number of workplaces which are more than 90% occupied has increased by 11.6%-points. The other bands look positive, too.

2

Occupancy compared to last year 60.0% 51.9% 50.0% 41.4% 40.0%

32.9% 27.2%

30.0% 20.0% 10.0% 0.0%

9.8% 3.5%

8.7% 7.2%

7.6%

0.0%

Much lower

Lower 2017

The Same

Higher

3.7%

6.1%

Much higher Don't know 2018

Again, we can see a growing tendency for providers to have higher yearon-year occupancy, especially in big cities, as a majority of respondents are from Barcelona and Madrid. This year, a smaller proportion of offices maintain the status quo or have fewer tenants. INDUSTRY REPORT

40

SPAIN

3

4/7

Occupancy expectation in 6 months 50.0% 42.6% 40.0%

36.6% 33.9%

30.0%

26.5%

24.7%

20.0%

14.8% 9.2% 8.7%

10.0% 3.0% 0.0%

0.0%

Much lower

0.0% 0.0% Lower

The same

Higher

2017

Much higher Don't know 2018

In 2018, fewer respondents believe that occupancy will soar in 6 months an 11.7%-points decrease since last year. However, as the other bands are almost unchanged, they have only slightly lowered their expectations. Now over 40% of all providers aspire to have more tenants soon.

4

Achieved prices for office contracts or workstations compared to last year 80.0%

72.0% 66.5%

70.0% 60.0% 50.0% 40.0%

25.8%

30.0% 20.0% 10.0% 0.0%

12.4% 2.7%

8.8%

7.7%

0.0%

Much lower

Lower 2017

The same

Higher

4.1%

0.0%

0.0% 0.0%

Much higher Don't know 2018

With the overall market stability and over half of providers having higher occupancy, it is not surprising that a quarter of them - 17%-points more than last year - have increased prices. Most flexible workspaces have the same rental rates. INDUSTRY REPORT

41

SPAIN

5

6/7

Expected price level in 6 months 90.0% 76.9%

80.0% 70.0%

61.9%

60.0% 50.0% 40.0%

31.7%

30.0%

23.1%

20.0% 10.0% 0.0%

2.9%

0.0%

3.5%

Much lower

0.0%

Lower

0.0% 0.0% The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

As we can see in the previous graphs, the demand for flexible workspaces is growing. Therefore, none of the respondents plan to lower prices in the near future to stay competitive, and most will have the same rates as before.

6

Initial contract length compared to last year 80.0%

72.7% 70.8%

70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%

19.2% 11.2%

13.0%

10.0%

3.1%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

Like in Denmark and the Netherlands, the overwhelming majority of flexible workspaces have the same length of contracts as last year. Almost one-fifth of all respondents have rented out their workspaces for a longer period.

INDUSTRY REPORT

42

SPAIN

7

7/7

General outlook 70.0% 57.7% 54.5%

60.0% 50.0% 40.0% 30.0%

24.2% 20.4%

20.0%

9.7%

9.1%

10.0% 0.0%

21.9%

0.0% 0.0% Very negative

2.5%

0.0% Negative 2017

Neutral

Positive

0.0%

Very positive Don't know 2018

Generally, the market is healthy in Spain: there are no negative sentiments this year, whereas the number of providers who believe the industry has very bright prospects has doubled.

43

Sweden This year, the Swedish flexible workspace industry lives up to its reputation as one of the liveliest and the most competitive. Unlike in the rest of Europe, there is a downward trend in price expectations. Fewer providers plan to increase prices as they are already high in such a booming market.

SWEDEN

1

2/7

Average office occupancy 50.0%

44.8% 44.4%

40.0% 33.3% 30.0% 21.6% 20.0%

15.8%

10.0%

14.4% 5.2%

3.4%

11.1%

6.0%

0.0% Under 60%

60% - 69%

70% - 79%

80% - 89%

2017

Over 90%

2018

The increased popularity of flexible workspaces in Sweden can be observed in the graph above. The biggest growth is in the 80-89% occupancy band - 11.7%-points, while there are threefold fewer offices with the lowest occupancy.

2

Occupancy compared to last year 60.0% 51.5% 50.0% 38.1%

40.0% 30.0%

26.7%

22.7%

22.2%

20.0% 10.0%

15.6% 4.7%

2.0%

7.8%

5.1%

0.0%

0.0% Much lower

Lower 2017

The Same

Higher

3.6%

Much higher Don't know 2018

2018 has been no different regarding occupancy to more than half of respondents, and only 7.1% performed worse than last year - 20.3%-points decrease, which is heartening.

INDUSTRY REPORT

45

SWEDEN

3

4/7

Occupancy expectation in 6 months 50.0%

44.4% 39.8%

40.0%

37.0% 31.5%

30.0%

24.4%

20.0% 10.0%

10.0% 5.6%

4.3% 3.0%

0.0%

0.0% Much lower

Lower

The same

Higher

2017

0.0% 0.0%

Much higher Don't know 2018

2018 has brought heightened expectations to Swedish providers - more than 40% believe they will have more tenants, although almost the same proportion predicts no changes. There is a significant decrease in those awaiting worse occupancy - 15.7%-points.

4

Achieved prices for office contracts or workstations compared to last year 80.0%

72.2%

70.0% 57.5%

60.0% 50.0%

37.1%

40.0% 30.0%

23.2%

20.0% 10.0% 0.0%

3.4%

0.0%

Much lower

2.0%

4.6%

Lower 2017

0.0% 0.0% The same

Higher

0.0% 0.0%

Much higher Don't know 2018

The tendency towards higher prices has been reducing since 2016. Two-thirds of flexible workspaces having the same prices as last year, it seems the rental rates have stabilized. Naturally, there have not been any sharp fluctuations. INDUSTRY REPORT

46

SWEDEN

5

6/7

Expected price level in 6 months 80.0%

75.1%

70.0%

62.2%

60.0% 50.0% 40.0% 27.3%

30.0%

20.2%

20.0% 10.0% 0.0%

2.9%

7.6% 0.0%

Much lower

3.4%

Lower

0.0% 0.0% The same

Higher

2017

0.0% 1.3%

Much higher Don't know 2018

It seems that pricing plans are based on the achievements in Sweden. Twothirds of the providers do not expect any changes in six months. It resembles the situation in Spain, where the market is also buoyant, which ensures high occupancy and thus profitability.

6

Initial contract length compared to last year 100.0% 90.0%

82.7%

86.7%

80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%

8.5%

8.8%

5.9%

7.4% 0.0%

0.0% Shorter

The same 2017

Longer

0.0%

Don't know

2018

The overall market stability refers not only to rental rates but also to contract length. In 2018, even more providers have signed the same contracts as the year before, and only a small proportion of 13.3% have experienced changes. INDUSTRY REPORT

47

SWEDEN

7

7/7

General outlook

60.0% 49.8%

50.0%

38.9%

40.0%

32.7%

30.0%

34.7%

25.9%

20.0% 6.7% 5.7%

10.0% 0.0%

4.2%

0.0% 0.0% Very negative

Negative 2017

Neutral

Positive

0.0% 1.4%

Very positive Don't know 2018

The most noticeable shift is from very positive market sentiments towards more neutral. The situation is already very good for many providers. Therefore, more than 40% expect steady development rather than explosive growth in the future, with only 5.7% being pessimistic.

48

Asia More than 50% of providers believe they will be able to reach a new level in the near future, which resemples the confident mood in Europe.

This year, providers of flexible workspaces mostly from Australia, India, China and Singapore have participated in our Industry Survey. In 2018, we can observe some growth in the lowest occupancy band, whereas the number of almost fully occupied workspaces has fallen. Compared to last year, the occupancy situation has improved for a quarter of the respondents, but, unfortunately, worsened for virtually the same proportion. Many providers have managed to increase prices, while over 40% have maintained the status quo. However, 16.2% of all survey participants plan to change their pricing policy and reduce rental rates, which will probably lead to the retention of the existing clients and will help to attract new business tenants. As we can see from our latest Client Survey, many workspaces have already put considerable effort in making their clients feel like home, providing them with first-class facilities and offering high flexibility, which is increasingly valued, especially by startups and smaller teams. Despite these outstanding achievements, there is still space for improvement. In Asia, more than 50% of providers believe they will be able to reach a new level in the near future, which resembles the confident mood in Europe. We wholeheartedly support this spirit of optimism and look forward to seeing the industry’s significant expansion in the year ahead. 49

ASIA

1

2/4

Average office occupancy 40.0%

35.6% 31.8% 28.9%

30.0%

25.6% 21.8%

21.5%

20.0% 12.6% 8.5%

10.0%

9.1%

4.6% 0.0% Under 60%

60% - 69%

70% - 79%

2017

80% - 89%

Over 90%

2018

Overall, we can see a downward trend: some flexible workspaces which were 70-79% occupied last year have lost tenants and moved to the lowest occupancy bands, and another part improved their competitiveness, which accounts for the growth of the 80-89% band.

2

Occupancy compared to last year 50.0% 40.6%

40.0%

42.1%

28.6% 25.0%

30.0%

23.3% 19.9%

20.0% 10.0% 0.0%

6.7% 0.0%

3.1%

Much lower

Lower 2017

The Same

Higher

4.3%

4.2%

2.2%

Much higher Don't know 2018

There is a small growth in the same and higher occupancy bands - 1.5 and 3.4 %-points respectively. Also, there is a small proportion of workspaces with a much lower number of tenants, which did not exist last year, with a simultaneous decrease in the lower band. INDUSTRY REPORT

50

ASIA

3

4/4

Expected price level in 6 months 50.0% 42.9% 43.3% 40.0%

36.7%

34.3% 30.0% 21.1% 20.0% 12.7% 10.0% 0.0%

0.0%

3.5%

Much lower

1.7% 2.6% Lower

The same

Higher

2017

0.0% 1.2%

Much higher Don't know 2018

Almost 40% of all respondents hope to increase prices in the future, whereas over 40% do not intend to change their rental rates. For 16.2% of the participants, reducing prices might be a way to attract new tenants.

4

General outlook for the rest of 2016

60.0%

55.5% 46.9%

50.0% 40.0% 29.8% 26.6%

30.0% 20.0% 10.0%

2.9% 1.4%

6.4%

8.6%

8.6%

0.0%

0.0% Very negative

11.2%

Negative 2017

Neutral

Positive

2.1%

Very positive Don't know 2018

The graph shows that the proportion of providers with a positive outlook has remained almost unchanged since last year. More than half of respondents believe the industry has a good growth potential, which they have all chances to tap into. INDUSTRY REPORT

51

North America The average office occupancy in North America is as high as last year, with two-thirds of all workspaces in two topperforming groups.

The achieved results are more than impressive, considering that the US market is among the largest in the world, or even number one, depending on measures. They also serve to confirm the conclusion we have reached above - flexible workspaces are growing in popularity, which is well-deserved as they bring many benefits to businesses opting for this solution. The average office occupancy in North America is as high as last year, with two-thirds of all workspaces in two topperforming groups. Compared to 2017, over 30% of all respondents have more tenants, but the growth pace has slowed down a bit. This influence reverberates in the price expectations: more than half of workspaces do not plan to increase rates. However, like a year ago, almost 40% of North American providers believe they will be able to charge more. The level of optimism about the future in North America is as high as in Europe: half of the providers believe new business achievements are on the horizon. As we mentioned above, improving service through better facilities, creative design and more flexible terms to build up a clientele is a widely used practice. As not everybody enjoys big city life, expanding to smaller towns is another strategy which might support the market growth.

52

NORTH AMERICA

1

2/4

Average office occupancy 50.0%

44.8%

43.2%

40.0% 30.0%

20.5%

20.0% 10.0%

27.3%

24.7%

4.2% 4.7%

3.1% 4.3%

Under 60%

60% - 69%

23.2%

0.0% 70% - 79%

80% - 89%

2017

Over 90%

2018

The occupancy figures have not changed much since last year. Over 40% of flexible workspaces are more than 90% occupied, which resembles the situation in the European industry leaders. Only 9% of the providers are in the lowest occupancy bands.

2

Occupancy compared to last year 50.0% 41.1% 40.9%

40.0%

32.5%

34.1%

30.0% 18.2%

20.0%

11.3%

9.4%

10.0% 0.0%

4.5% 0.0% 0.0% Much lower

Lower 2017

The Same

Higher

5.7%

2.3%

Much higher Don't know 2018

The majority of providers have the same occupancy as last year, whereas over one-third have achieved better results. 18.2% have fewer tenants than in 2017 - a 6.9%-points rise. Despite this minor change, the market looks very stable in North America. INDUSTRY REPORT

53

NORTH AMERICA

3

4/4

Expected price level in 6 months 57.1% 53.2%

60.0% 50.0%

39.7%38.1%

40.0% 30.0% 20.0% 10.0% 0.0%

4.7% 4.8% 0.0% 0.0%

0.0% 0.0% Much lower

Lower

The same

Higher

2017

2.4%

0.0%

Much higher Don't know 2018

Over half of the respondents predict the same level of prices in the next six months, whereas almost 40% plan on increasing. It is not surprising as the market is thriving. Interestingly, only tiny 4.5% of the respondents expect the prices to go down, and none - that they will soar or nosedive.

4

General outlook for the rest of 2016 50.0%

45.2% 43.2%

40.0% 30.5% 26.4%

30.0% 20.0% 10.0% 0.0%

23.8% 19.7%

4.2% 4.6%

2.4%

0.0% 0.0% Very negative

Negative 2017

Neutral

Positive

0.0%

Very positive Don't know 2018

The market sentiments in North America reflect the achieved results. Almost half of the survey participants are full of optimism about the industry development, which even outweighs the number of providers with a neutral attitude. Only 4.5% believe the situation will get worse. INDUSTRY REPORT

54

Your reliable and trusted partner in the industry MatchOffice has all kinds of commercial properties for rent listed on our global and local websites: flexible offices and coworking spaces, stores, warehouses, conference rooms and virtual offices to help you achieve remarkable business success. For the convenience of our partners and clients, we have introduced a new design aimed at taking the user experience on our search platforms to a new level. We are also constantly improving COWORKING CONFERENCE 2018 the existing features and functions, Amsterdam, 14-16. Nov: Get the latest trends & insights such as virtual tours, listviews, as well book your discounted ticket with promo code: MatchOfficeCWE18 as cooperation procedures. Therefore, Book here now! we have been chosen as a reliable partner by more than 6,000 flexible workspaces globally. We will always support the like-minded. Therefore, for the third consecutive year, MatchOffice will sponsor the ‘Coworking Europe’ conference, held in the beautiful Amsterdam city this November.

Abelogade 4, DK-2100 Copenhagen +45 39 45 85 50 [email protected] MatchOffice is present in more than 100 countries and has local sites in a number of coutries including: Sweden, Denmark, Norway, Finland, Germany, The Netherlands, Spain, Switzerland, Ukraine, Luxembourg, Poland, France, Belgium, United Kingdom, Austria, Italy, India, Singapore, and Hong Kong.