Flex office pricing faces disruption amid WeWork woes

Flexible office operators are in a fight to outdo each other as the sector enters a period of pricing “disruption” amid WeWork uncertainty, according to DeVono. The firm’s latest snapshot of the London office market found operators are facing competition to “not only attract new tenants but also work harder at retaining their existing clients”. The research, covering the period directly before WeWork entered bankruptcy protection in the US, found providers have since been offering “substantial discounts on fees” and WeWork in particular has been leading this charge, DeVono said. “In turn, the power of negotiation shifted in favour of the customer, with occupiers being bullish in their demands,” the report said. “What this has meant for the wider market is a disruption in terms of pricing.” As a result, the sector is facing wider market upset, with tenants looking to receive significant discounts that are not reflected in headline pricing. Despite stressing that WeWork’s woes are unique and not indicative of a sector-wide problem, the agency was clear to note that “it does spark uncertainty amongst businesses, especially those caught up in the proceedings”. Should this continue into the fourth quarter, this will likely result in a pricing revision before the end of the year. To send feedback, e-mail chante.bohitige@eg.co.uk or tweet @bohitige or @EGPropertyNews Photo © Erik Pendzich/Shutterstock