Adapting to Change: A Tech Perspective on Germany’s Flexible Workspace Industry

Following our announcement that Florian Kappes is joining us at technologywithin as Director, Europe, we tapped into his extensive knowledge of the state of the German flex market and how technology enhances operations and user experiences.

I’ve lived in Berlin over the past 11 years, moving back to my homeland from the UK while brokering deals in the flexible workspace industry with the Instant Group. The UK’s flexible workspace market is hyper-focussed on London but, in Germany, it’s very decentralised – with key markets established across Berlin and Munich (Germany’s largest markets), as well as Hamburg, Frankfurt, Dusseldorf, Stuttgart, and Cologne.

The state of the German flex market

Pre-pandemic, there was a huge demand for larger spaces (entire floors or half floors), partly driven by a general low vacancy for office space. But like the rest of the world, the past couple of years have challenged these key markets, which have seen the change in office usage and the rise in available sublet office space. Some of the big German players have experienced closures, with planning and openings delayed, and portfolios slimmed down (WeWork, most notably). According to Cushman & Wakefield’s Flexible Office Space Report 2023 – without the pandemic, “the flex stock would have been significantly higher – by around 20-25%.”

The Instant Group recently reported that London’s flexible workspace market is on the road to recovery. It’s unclear yet whether Germany is on the same path, although at the beginning of 2023, flex stock in Germany’s top seven markets stood at just over one million sq m, with 28 openings and 77,000 sq m of space in the works (Cushman & Wakefield). In March of this year, Mindspace (although more niche in the UK, it’s dominant here in Germany), opened its 12th site in Dusseldorf, complete with 600 workstations spanning 4,000 sq m.

It’s worth noting that smaller workspaces in the regional cities have proved more resilient to market shocks. 60% of providers offer coworking, ranging from council-supported micro hubs to smaller coworking spaces, Germany has a large number of providers, with some just operating one workspace – I had the pleasure of meeting several at the recent Cowork 2024 conference in Karlsruhe last week. Berlin has twice as many coworking locations as Hamburg and Munich – Germany’s second-largest coworking markets. However, some independent operators consciously avoid the key markets to provide their communities with tighter networks. These include Sleeves Up!, Workinn, 1000 Satellites, and Goodspaces, to name a few.

A general trend across different providers and markets is the demand for smaller spaces accessed by a bigger team using additional access cards and an internal tool to control the usage. This trend, and the challenge of connectivity for providers, were widely discussed when I attended the Cowork2024 conference. Most companies still want to offer their employees a professional and inspirational work environment, but without paying for empty desks.

Meeting hybrid working needs

The home working trend underscores the success of independent Flex providers, supporting people to work near home over commuting to the city. Meanwhile, the larger providers are on a flight to quality, and amenities. For instance, when I worked as Head of Sales at FORA (managing five sites across Germany), we opened a new site in Berlin with a state-of-the-art fitness centre. Prospective tenants were enthusiastic about how these amenities could help them to attract talent.

Additionally, the larger providers are adapting workspace design solutions to meet evolving hybrid working needs. For example, replacing communal areas with private workstations and phone booths facilitates video calls and increases privacy during working hours. Workspace management software, like access control solutions, enables safe and secure access to private offices too.

Technology is pivotal for the industry, with flexible workspace connectivity fundamental in every space – whether it’s a coworking space serving freelancers or a workspace leased by corporations. No business would work somewhere without connectivity, and we all require access to super-fast WiFi.

Connectivity for all

Design Offices is my go-to workspace when I’m experiencing internet issues at home. I know I can use a space near home with reliable coworking WiFi. But, it’s also about the ease of dropping into a flexible workspace. Likewise, hybrid teams that don’t have a physical office are leaning into the ad-hoc booking trend for that all-important in-person collaboration.

Online booking platforms facilitate on-demand desk booking. Platforms like Desana and OneCoworking, are fantastic tech solutions enabling end users to come to workspaces. For providers, online booking software increases brand visibility and is specifically useful for new market entrants. But without proper integration with workspace management software, online booking tools can be operationally complex, and it’s not always financially viable either.

Myriad technology companies service the flexible workspace industry, but operators simply can’t use lots of different platforms for day-to-day management. It’s too complicated. Ideally, integration with one workspace management platform will enable operators to manage the entire customer journey.

After all, every operator needs a system to manage their clients. For flexible workspace providers, the key to survival is providing a secure, fast, easy-to-use, and frictionless technology, enhancing the user experience beyond expectations.

Florian Kappes has recently joined technologywithin – as Director, Europe – leading the company’s launch into the European market. Contact Florian to find out how the UK’s number one flexible workspace internet and WiFi provider can help you provide great connectivity in your space.