According to a survey conducted in 2021 by the Spanish association of flexible office operators, 24% of operators are planning to open new spaces over the following 12 months as the vast majority expect occupancy to remain stable or rise further.
Most flexible space supply is concentrated in Madrid, mainly in the city centre, and Barcelona, in the highly dynamic business hub 22@, but providers are also tapping into new locations. Secondary cities like Málaga are likely to embrace flex space as they benefit from an entrepreneurial and tech environment that involve significant use of freelance talent and project work.
Spain offers strong fundamentals and a wide potential client base to flexible office providers looking to expand and penetrate new markets. The country has a high proportion of freelancers, comparable to some of the most established flexible space markets in Europe such as the UK and Netherlands.
The country also performs above the EU average in terms of the number of high growth enterprises, second after Germany, and in terms of employment share of HGEs, which stands above 15%, according to the latest data from Eurostat.
In Spain, companies tend to be smaller. According to the National Institute of Statistics, 83% of businesses have 2 employees or fewer and 99% have fewer than 50 employees. More than 55% of people employed there work for small companies with less than 50 employees compared to less than 50% of the people employed in countries like Netherlands, Germany or France according to Eurostat.
The Spanish business environment is dynamic with a large share of young companies. Only 18% of companies in Spain have been going more than 20 years.
Flex space is well-positioned to meet the needs of young companies as it brings flexibility to expand and contract at short notice compared with long-term commitments of traditional leases.
Potential users of flex spaces are not limited to freelance, small businesses and start-ups. An increasing number of big corporations need solutions to adapt to the new ways of working. Much of the demand is driven by the need to attract talent and by flexibility requirements to match market uncertainty.
Growing demand is being met with new supply. Traditional office landlords who entered the flex sector before the pandemic by developing their own brands, such as Colonial with Utopicus and Merlin with its brand Loom, are continuing with their expansion strategy.
In October the former opened Utopicus Paseo de la Habana, a new 5,800-square-metre office building in Madrid, which is its seventh office building in the capital. A opening is planned for March 2022 at Diagonal 532 in Barcelona which will bring its total flex portfolio up to 12 centres in Spain.
Loom will open at least three centres and expand three others in 2022. The portfolio is made up of nine centres, concentrated in Madrid and Barcelona, but the company is considering new openings in cities like Málaga.
The international flex space provider IWG is also progressing in its expansion plan in Spain. In 2021, the company added 22,000 square metres to its portfolio, in seven centers. After scheduled opening, the company will have over 50 centres in 17 Spanish cities, with the goal of being present in all provincial capitals and to launch additional brands following the opening of their first "HQ" sites in Madrid and Barcelona in 2021.