As an increasing number of employees finally return to the workplace after months of working from home, the coworking and flexible office industry stabilized this autumn.
With more locations opening than closing for the first time since the COVID-19 pandemic began, the end of the year brought about rising coworking prices and consistent demand for private offices, meeting rooms, virtual offices, and hot desks in flexible workspaces worldwide.
As the year concludes, the following article explores the projected growth of the coworking industry as well as specific trends and predictions for the future of the industry in 2022.
The number of coworking spaces worldwide is projected to reach nearly 25,000 by the end of this year and surpass 40,000 by 2024.
While the industry grew at a slower rate as a result of COVID-19 in countries in virtually every region of the world, the growth rate of the industry is now expected to develop rapidly from 2022 onwards.
This expectation is largely a result of new demand from enterprise clients continuing to take hold and coworking networks continuing to expand into new hub-and-spoke locations.
Furthermore, it is estimated that almost 5 million people will be working from coworking spaces in 2024, an increase of 158% compared to 2020.
Based on listings on Coworker.com, the United States remains the largest market for flexible workspaces with over 3,818 coworking spaces across the country, followed by India with 1,789 spaces and the United Kingdom with 1,097 spaces.
In terms of yearly growth for 2021 out of the largest markets, the United States and India are the fastest growing, followed by the United Kingdom and Spain.
The graph below shows the 10 largest markets by number of coworking spaces and the corresponding share of flexible workspaces globally.
Demand for coworking spaces
After a cautious 2020, we’ve seen demand conservatively increase in 2021. This number shows that levels are close to pre-pandemic levels, as demand has steadily increased since 2019 after an abrupt halt in 2020.
Furthermore, the demand for particular coworking services, such as private offices or meeting rooms, has also experienced changes year over year.
For example, global meeting room demand within flexible office spaces is up 73% from 2020. Private office demand has also increased since 2020 by 26%.
Pricing in 2021
The global average price per desk rose from $183 to $189 per month between 2020 and 2021, showing an increase of 2.73%. This change gives evidence of the further maturation of coworking markets, with spaces during COVID-19 seeing demand rise from corporate clients and many facing greater competition to draw in employees working from home.
From a continent perspective, every continent with the exception of Asia showed an increased monthly desk price. In Asia, the average price decreased by -1.17% from $146 USD to $144 USD.
From a country perspective, the most expensive country for monthly hot desks was Monaco, with an average price of $397 USD per month. In second place was Switzerland, with an average price of $376 USD per month.
Flexible office space predictions for 2022
After facing a monumental shift in the way we work during the COVID-19 pandemic, companies large and small are now adopting a flexible or hybrid work model as the traditional office model becomes less popularized.
Moving into 2022, one of the main trends that will be seen in the coworking industry is the popularity of satellite offices and localized workspaces. Already, the industry has witnessed the growth of the hub-and-spoke model, where companies operate a main headquarters location in an urban setting as well as suburban “spoke” offices that are closer to employees’ homes.
Another trend for 2022 is the rise of corporate coworking. Large companies such as Pinterest, BP Plc, Dropbox, and Fujitsu have already demonstrated how the pandemic has altered how corporate headquarters are operating, leading them to adopt hybrid work models and utilize coworking spaces instead.
Other flexible office industry trends for 2022 include landlords entering the coworking arena. Established landlords like Tishman Speyer, BritishLand, Hongkong Land Holdings Ltd, and Swire Properties are now competing directly with coworking operators after launching their own coworking arms.