Some flexible office space companies are facing failure this year as they are forced to lease out property to other businesses for below the rate they are paying their own landlords, Savills, the property advisory firm, has warned.
Mat Oakley, head of UK commercial research at Savills, said: “There is very little product differentiation in the sector. There are new entrants piling in . . . and if you’re only competing on price, it’s very much a downward spiral. I think we will start to see some failures in that sector from this year.”
The forecast comes as Softbank, the Japanese technology investor, is in talks to slash its planned investment in Wework, one of the best-known shared-office providers, to about $2bn, according to a report by the Financial Times. Funding of $16bn had been discussed late last year.
