The flex office market is rapidly expanding throughout Canada as demand continues to accelerate for different working space from the traditional office environments.
A report by Colliers International indicates that across 12 core Canadian markets flex office space accounted for 6.6 million square feet at the end of 2019, representing 1.1 per cent of national office inventory.
In Calgary, flex space of 783,605 square feet represented 1.1 per cent of the city’s office inventory. That was in 50 locations and the total flex space in the city was 11.9 per cent of the national flex office inventory.
Toronto is the Canadian leader when it comes to this trend. Across 177 locations, Toronto has 2.7 million square feet of flex office space for 1.1 per cent of the city’s office inventory. And the city’s flex office space is 40.8 per cent of the national total.
“Within the past three years, 2.4 million square feet of new flexible office space was delivered in Canada, representing an increase of 59 per cent in total inventory and resulting in 110 new locations,” said the Colliers report. “Although concerns have been voiced that this growth is unsustainable, the low proportion of flex office across Canada indicates that this inventory has not grown in excess and in the case of a downturn, does not leave the market overexposed.
“In addition, there have been continuous increases in the number of locations opened per annum, suggesting that the new flex supply brought to market has not yet satiated demand.”
The majority of Canadian markets remain in the infancy stage of flex office space, with eight of the 12 markets totaling less than 300,000 square feet of inventory, said Colliers.
“The popularity of flexible office space is disrupting the real estate industry, revolutionizing the way businesses and their employees view traditional office space and approach workplace strategy. Although flex office still represents a small share of overall office occupancy, its footprint is expanding rapidly across Canada. The driving force behind flex office popularity is, as its name indicates, the flexibility it provides end-users. This is primarily realized in more lenient lease structures, ranging from one month to several years, which requires less commitment from a business and significantly lowers overall risk,” explained the Colliers report.
“Another driving force behind the popularity of flex office is the critical shift it has addressed in today’s market regarding wellness and the importance of healthy work environments. Flex office spaces are designed with productivity in mind yet foster a sense of community, helping to create environments where employees feel motivated, energized and inspired. This allows them to tap into a professional social network and in turn amplify their own creative and collaborative capabilities.
“Apart from reaping the benefits of employee productivity, businesses recognize that flex office space speaks to something greater: people are now in tune with how their jobs can either positively or negatively impact their lifestyle and overall happiness and it weighs heavily on which work opportunities they choose to take or not. This is a crucial reason why flex office is popular not only among freelancers and small startups but also in attracting enterprise clients such as Deloitte and Amazon. If businesses choose not to address this shift and adapt their workplace strategy accordingly, they will become overall less competitive in their ability to acquire and retain top talent.”
Mario Toneguzzi is a business reporter in Calgary.
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