Tech sector has ‘dominated' flex office market

The Technology, Media and Telecoms (TMT) sector dominated activity in the European flex market in 2022, according to global real estate advisor, CBRE.

TMT accounted for 52% of transactions in Europe by number of deals, and 62% by number of seats acquired driven partly driven by more dynamic changes in headcount within the sector.

The agent said this has traditionally been due to rapid growth but more recently consolidation, which better lends itself to more flexible solutions to ensure a rightsized portfolio.

At the start-up end of the sector, flex space remains attractive to those who want to preserve capital on their core business and furthermore, need agility to navigate volatility in market conditions.

When looking at other sectors, Financial and Professional Services followed at 21% by number of deals and 27% by number of seats acquired. However, the sector remains focused on return-to-office strategies for core buildings.

Despite lower levels of activity within Life Sciences, many occupiers in this sector have been, or are, going through business divestment programs which have incorporated a significant component of flex space as part of their broader real estate strategies.

Richard Holberton, senior director, research , said: ‘Throughout 2022, we saw transaction volumes and occupier enquiries continue to accelerate and our research shows a 37% increase in transactions completed across the whole market when compared with 2021. Flex is becoming a core part of the decision-making process for many occupiers as they look to increase the proportion of flex space in their real estate portfolios.

Tim Hamilton, European flex lead, added: ‘Whilst the changing economic climate could impact occupier sentiment, there remains a significant gap between corporate appetite for flex space and current availability and as a result, we are yet to see such a slowdown in activity levels. We anticipate the shift towards the use of flex space to be more pronounced in 2023 as we see increased uncertainty in the market.’

See also article 'Tech sector retreat feeds into rising office vacancy' which appears in the March/April issue of PropertyEU magazine



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