The evolution of offices: how the market is changing around flex and managed space

From hands-off and functional to flexible and hospitality-focused, today’s offices are a completely different beast to what they were just a couple of decades ago. As the sector continues to evolve, so too must our understanding of it – especially when it comes to flexible workspace. That understanding is key to ensuring that all parties involved – including owners, occupiers and brokers – get real value from flexible workspace deals.

A shift in priorities

Today, office positioning is more important than ever. Occupiers have more options, ranging from fully remote setups to traditional leases and everything in between. The decades-long rise of flexible work has reframed offices from daily destinations to a strategic tool: not just where a team works, but why and how it gathers.

Serviced offices have long been part of the landscape, but their reinvention began around 2012/13, led by brands like WeWork. These innovators treated office space as a consumer product with beautifully designed interiors, smart tech integrations, curated community events, barista-grade coffee and more – setting a high new benchmark for occupier expectations.

As a result, the industry pivoted to focus on occupier experience. While some experiments have fallen short, flexible workspace models that prioritise design, service and amenity (critically, alongside an effective business model) are thriving.

The market gap

Flexible offices are now a standard part of the market, and are especially appealing to start-ups and smaller businesses. However, a consistent challenge arises as companies grow.

Around the 20- to 25-person mark, many businesses start to outgrow shared, serviced spaces. They begin looking for something more mature without the commitment and complexity of a traditional long-term lease.

This has created a clear gap in the market that managed offices are filling. They offer the best of both worlds: private, design-led environments with flexible terms and fully customised services. This model delivers autonomy, identity and scalability, often with a medium-term commitment of two to three years or five-plus years with a break at three.

Changing roles and expectations

The shift toward flexible and managed space is also changing how deals are structured and who are involved in them. Traditional distinctions between owner and provider, broker and occupier representative, are starting to blur. Occupiers often don’t distinguish between these roles – and increasingly, some argue they shouldn’t have to.

The advisory function in particular is evolving fast. In a service-led, fast-paced market, the type of advice occupiers need has changed. Flexibility, speed and an understanding of product and experience are becoming as important as lease length and legal structure.

As more established firms adapt to occupier demand, many are building dedicated flex advisory teams. Alongside that shift, broker fees in flexible deals are under the spotlight, prompting ongoing debate about how value is created and measured.

Transparency and data

One of the biggest hurdles for the flex space market is the lack of reliable data. Traditional leasing operates on decades of shared transactional data, giving transparency to rents, incentives and terms. By contrast, the flexible workspace sector is still opaque. The absence of comparable data creates uncertainty and frustration – for asset owners, occupiers and even advisors trying to guide their clients.

What’s more, no one has a clear, consistent picture of how large the flex and managed market really is or how fast it’s growing. Without these benchmarks, it is challenging to quantify demand, assess performance or make like-for-like comparisons with traditional leases.

If the serviced and managed markets are to mature, we need more openness and shared insights.

Help shape the future

This spring, Kitt is conducting a new piece of in-depth research to better understand how the serviced and managed office markets are evolving. We aim to close the knowledge gap, shed light on changing occupier expectations and tackle the data transparency challenges holding the market back.

Whether an owner, adviser or broker, your experiences will help paint a more accurate picture of where the market is heading and what needs to change. The survey takes just two minutes to complete and in return, we’ll send you our special Kitt Insights report with all the findings once it is published in June.

Click here to take part and help define the next generation of office leasing.