Co-working specialist The Office Group launches expansion in Berlin

One segment of the German office market that’s looking optimistically into the future is that of co-working and flexible workspaces, and here at REFIRE we are anecdotally hearing from many smaller operators how they’re looking to expand their space and take on new leases. 

A recent survey by the Workthere placement service, which is part of property adviser Savills, seems to confirm this trend. Stephan Schörnig of Workthere said, "Compared to our last survey in May, it is clear that confidence in flexible offices is gradually returning worldwide and the positive trend seems to be continuing. Companies have become more open and agile in the way they work during the crisis and are increasingly considering flexible workspaces as an alternative to the traditional office or home office."

Workthere also said the number of flex office operators asking their landlords for rent relief has been falling steadily across Europe – from 34% in April to 28% in May and by July/August it was down to 24%.

One new arrival onto the German market is The Office Group, which has so far been exclusively operating in the UK but is now expanding into Germany. Its first branch will be in Berlin, but other cities are expected to follow rapidly. The Berlin branch is in the Kontorhaus Kronenstrasse 63, with Frankfurt at the Alte Oper and Hamburg at the Domplatz opening before the end of the year. Munich and a second Berlin location will likely follow. The company operates 50 branches in the UK.

The Kontorhaus space in Berlin is 4,300 sqm, of which 2,500 sqm are pure office space, with the co-working share of the space being less than 2%. Overall there is space for 400 workspacs, of which 160 will kick off at the opening. The company said its planning was barely influenced by COVID-19. "Due to the high proportion of communal areas and low-density offices, we did not need to change the spatial planning and the pandemic did not affect the search for tenants from our side," it said. It said it could identify two clear trends – the first, the requirement for more space to comply with social distancing, and secondly, the need for LESS space initially as individual team members continue to work from home.

For many employees, of course, the option of working from home may be neither feasible nor desirable, and this is the niche that the flexible workspace operators are planning to capitalise on. Big companies realise the importance of informal communication among their staff.

Andreas Wende, the CEO of NAI apollo, cites research showing that 20% of German office workers want complete freedom over their working hours and location, while two-thirds say that between one and three flexible days a week would be ideal. Whatever it is, it’s clear that there will be no blanket return to the pre-coronavirus pattern of mass presentee-ism. A fall in office demand of 20-30% would seem to be realistic, he thinks. But demand will shift to providing flexible space for employees nearer to their homes, and firm’s imaginative solutions for collaboration, infrastructure and more flexible work patterns will lead to the rise of more co-working spaces, local business centres and community hubs, likely to be located closer to where lots of people actually live, in suburban and rural areas.

This won’t happen overnight, and meantime there will be plenty of obstacle to overcome, thinks Wende, regarding subletting and other co-working combinations that will have to be worked out to enable landlords to achieve something like original market rents.