Spacemade is preparing to make new hires and push ahead with its goal to have 50 flexible office locations in the UK in the next three years, after closing its latest funding round.
The £2m investment came from angel investors in real estate, finance, media and tech. The fundraise, completed over the course of three months, comes after a £1m funding round in March last year.
The flexible workspace provider, which designs and runs bespoke offices on behalf of landlords, said it would also use the investment to create a “digitised network of individually branded spaces”. To bolster that offer, the business recently launched an online marketplace for its locations.
Dan Silverman, co-founder of Spacemade (pictured above, left), told EG that the business was “working to attract some of the best talent” in real estate. “We are trying to build a brilliant operator for the future that’s not traditional, that’s hospitality-driven,” he said. “We need people from across the board, so we will be hiring into almost every team selectively in the coming months.”
Co-founder Jonny Rosenblatt (pictured above, right) said the fundraise demonstrated the “explosive potential” of the flex market. “There is a clear disconnect between what occupiers want from their working environment today – flexibility, amenity, space on demand – and what landlords are traditionally set up to do,” he said.
“The real estate market is having to move away from simply allocating capital to generate a passive, bond-like income. We see ourselves as the bridge between the two, delivering hospitality-driven operational real estate. Investors have recognised this shift and want to be part of the journey as we grow.”
Silverman said the operator had seen “incredible traction and tailwinds” during the past 18 months, with flexible working trends sped up by the pandemic.
Occupancy levels are averaging around 90% across the more mature locations in the company’s 155,000 sq ft portfolio, according to Rosenblatt, with bottom-line return above 27% of ERV. Spacemade operates 10 buildings in both city centre and suburban locations via management agreements with landlords including CBRE Investment Management and Southern Housing Group. Memberships have been capped at some of these locations, according to the business, with several buildings oversubscribed.
“Demand is only going one way – there is a seismic shift towards this flexibility,” said Rosenblatt.
The close-to-home market in particular has “skyrocketed” for the business, with Rosenblatt citing a 128% year-on-year rise in membership numbers at neighbourhood locations and related revenue consequently up by 180%.
In the past five months, Spacemade has signed agreements for four locations – including 27,000 sq ft at 10 Brindleyplace in Birmingham – and launched two neighbourhood spaces in Wimbledon and Cricklewood. It will also deliver a 60,000 sq ft mixed-use creative quarter in Hackney Wick.
See also: Spacemade to open next flex office in Putney
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