The Enduring Impact of Hybrid Work on Flexible Workspaces

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Four years after the great return to office, we stand at an inflection point in the evolution of work. What began as a forced experiment with remote work in 2021 has evolved into a permanent transformation of our working habits. In this article, we examine how hybrid work has changed the real estate market, particularly the flexible workspace segment, and what trends we can expect in the near future.

The Evolution of Hybrid Work (2021-2025)

From Crisis to Choice

When the first relaxations of COVID-19 measures were announced in 2021, many business leaders expected a complete return to pre-pandemic work patterns. Now, in 2025, it's clear that this expectation has not materialized. Hybrid work is no longer a temporary solution but a conscious choice for both employees and employers.

Already in 2021, Microsoft's Work Trend Index showed that 73% of workers wanted flexible remote work options to continue, while 67% desired more in-person time with their teams (Microsoft, 2021). These seemingly contradictory desires have led to the hybrid model we know today.

The Current State of Affairs

In 2025, employees could technically return to the office five days a week, but more than half choose to remain hybrid, with an average of 2-3 days in the office and 2-3 days at home or even working from abroad. This transformation to what McKinsey calls "hybrid places" has lasting implications for the real estate market (McKinsey, 2023).

Recent research shows that employees now come to the office an average of 3.5 days per week, ranging from 3.1 days in London to 3.9 days in Beijing (CBRE, 2023). This means that office attendance is still approximately 30% lower than before the pandemic, a trend that has stabilized over the past few years.

The Explosive Growth of Flexible Workspaces

Flexible workspaces have emerged as the big winners of the hybrid revolution. What was once a niche market has grown into an essential part of companies' real estate strategies worldwide.

Impressive Market Growth

CBRE's forecasts from 2023 proved remarkably accurate: by 2025, almost 25% of all office space is being used flexibly, on track to reach the predicted 30% by 2030 (CBRE, 2023). The Instant Group predicted several years ago that the broader flexible office market would grow to 30% of the total market, while the share of coworking (including day passes and flexible memberships) would increase from less than 1% to 5% of the total office market (The Instant Group, 2023).

This growth is supported by high occupancy rates in flexible workspaces. In 2022, The Instant Group reported that 44% of operators globally had achieved occupancy rates above 80% (The Instant Group, 2022). These percentages have only improved over the past few years, underscoring the continued demand for flexible workspaces.

The Role of Flexibility in a Changing Market

McKinsey's prediction from 2023 that the total demand for office space in 2030 would be about 13% lower than in 2019 for the median city has led to a fascinating development (McKinsey, 2023). While traditional office space is indeed shrinking, flexible workspaces are partially filling this gap through their adaptability to the needs of the modern employee.

Several factors have contributed to this shift:

Changes in Work Patterns: With average office attendance at 3-4 days per week, companies have adjusted their real estate portfolios.
Cost and Efficiency: Flexible workspaces offer a cost-effective solution for organizations looking to optimize their real estate footprint.
Talent Recruitment and Retention: In a still tight labor market, the ability to work flexibly remains a crucial factor in attracting and retaining top talent.

Changing Usage Patterns of Office Spaces

The New Expectations of Employees

The experiences during and after the pandemic have fundamentally changed employee expectations. Now, in 2025, workers desire:

Flexibility in Time and Location: The freedom to choose when and where to work
Spaces that Promote Collaboration: Offices designed for teamwork and creativity
Technologically Advanced Workplaces: Seamless digital communication between office and home

This shift was already noted in 2022 by The Instant Group, when 96% of operators reported seeing changes in how clients were using their spaces (The Instant Group, 2022). A notable trend was the increasing demand for private offices within flexible workspaces, indicating a shift in user needs.

The 'Flight to Quality'

One of the most significant trends identified by McKinsey in 2023 is the 'flight to quality' - the growing preference for high-quality (Class A) office spaces (McKinsey, 2023). This trend has strengthened over the past two years, with significant implications for older, lower-quality buildings.

Companies that have reduced their office space now opt for smaller but higher-quality spaces better suited to the demands of hybrid work. This shift has led to a bifurcation in the market: premium office spaces are thriving, while lower-quality buildings struggle with high vacancy rates.

Opportunities and Challenges for Flex Space Operators

Technological Innovation as a Key to Success

Technology plays a crucial role in the success of flexible workspaces. According to CBRE, in 2023, about 30% of flex space operators planned to implement 'Smart Access' in their portfolio (CBRE, 2023). By now, we see that these implementations have largely been completed, and operators are investing in even more advanced technologies.

Key technological innovations in the sector include:

Advanced Booking Platforms: Intuitive systems that simplify the reservation of workspaces
Real-time Monitoring: Technology that provides insights into occupancy and use of spaces
Video Conferencing Integration: Seamless connections between physical and virtual participants

The Instant Group predicted in 2022 that operators would invest in real-time occupancy monitoring and video capabilities in meeting rooms (The Instant Group, 2022). These predictions have come true, with operators implementing increasingly sophisticated technological solutions to meet their clients' needs.

The Challenge of Inflation and Rising Costs

A persistent challenge for flex space operators is rising costs due to inflation and energy prices. The Instant Group reported in 2022 that 47% of operators expected to increase their rates by 6-15% in the next 12 months (The Instant Group, 2022). These predictions have been realized, with periodic price increases in the sector over the past few years.

Balancing these cost increases with the need to remain affordable for clients continues to be a delicate balancing act for operators in the sector.

Focus on Sustainability

Sustainability has become an increasingly important aspect of the flexible office market. The Instant Group reported that operators were implementing various strategies to achieve Net Zero, including internal training, procurement of renewable energy, and other initiatives (The Instant Group, 2022).

In 2025, sustainability is no longer optional but an essential part of the business strategy of every serious flex space operator. Companies and employees increasingly expect their workplaces to be environmentally friendly and contribute to broader sustainability goals.

Future Outlook

The Further Evolution of Flexible Workspaces

The future of work remains hybrid, with an even greater role for flexible workspaces. In the coming years, we can expect:

Further Integration of Technology: AI-driven workplace management systems and advanced digital collaboration tools
Increasing Focus on Wellbeing: Office designs that promote the mental and physical wellbeing of employees
Growth of 'Space-as-a-Service' Models: Flexibility not only in terms but in the complete service package

The Instant Group predicted that there would be more diversification in the offering, with a wider range of workplace solutions (The Instant Group, 2023). This trend continues, with operators becoming increasingly specialized in serving specific market segments.

The Blurring of Boundaries

The boundary between traditional and flexible office space will likely continue to blur. Traditional landlords have increasingly incorporated flexible elements into their offerings to remain competitive in a market that increasingly values flexibility.

McKinsey's concept of 'hybrid places' - flexible, adaptive spaces that can respond to the changing needs of employees and businesses - offers a vision for the future of office space that closely aligns with the trend towards flexible workspaces (McKinsey, 2023).

Conclusion

The rise of hybrid work has had an undeniable and lasting influence on the use of flexible workspaces. What began as a forced experiment during the pandemic has evolved into a fundamental reassessment of how we approach work.

The market for flexible office space is growing rapidly and continually adapting to the changing needs of modern employees and organizations. Flexible workspaces offer the necessary adaptability in a rapidly changing work environment and form the bridge between the traditional office and working from home.

For flex space operators, there are plenty of opportunities, provided they can respond to the demand for technologically advanced, sustainable, and flexible solutions. Success will depend on the ability to find a balance between flexibility, community, and functionality.

The future of work is hybrid, and flexible workspaces play a central role in this. With the right approach and investments, flex space operators can continue to play a leading role in shaping the future work environment.

Sources

CBRE (2023). European Flex Office Market Update H1 2024.
The Instant Group (2022). Flexible Industry Survey 2022.
The Instant Group (2023). 2023 CRE Predictions.
McKinsey Global Institute (2023). Empty spaces and hybrid places: The pandemic's lasting impact on real estate.
Microsoft (2021). The Next Great Disruption Is Hybrid Work – Are We Ready?

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