Former Cushman pros launch flex office operator

Flexible workspace operator Covalt has formally launched to market, having previously signed a number of agreements to immediately manage over 100,000 ft2  of office and amenity space.

Covalt said it offered owners, landlords and investors a management service for flexible workspaces, covering everything from branding and design through to fit out and community management.

The compamny stated it looked to offer 'improved returns' and the market’s 'first genuinely white label service', enabling landlords and investors to retain an existing brand or develop their own flexible workspace offering.

The flexible workspace operator has already signed agreements with major industry players and has similarly ambitious growth plans. Within the next five years, Covalt aims to have over 1 mln ft2 under management and a minimum of thirty centres, chiefly across London and the South East, but targeting key cities including Bristol, Birmingham, Manchester and Leeds.

Covalt was founded by former Cushman & Wakefield flexible workspace executives, Calum Russell (CEO) and Dave Moran (COO), as well as Julian Arlett (CFO) from luxury hospitality group Habitas

Russell said: 'The operator model for flexible workspace is ready for change.'

'Landlords are increasingly aware that their portfolios need to better reflect the needs of occupiers. There’s been a rapid evolution in expectations from clients with many now aspiring to work in spaces that draw their inspiration from hotels, offering world class design, fabulous amenities and great service.'

He added how repeated interest rate hikes had saddled some landlords with increasing debt. This meant there was a 'major opportunity' for Covalt to roll out a service to help drive up occupancy and increase returns.

'More broadly, flexible workspace is a sector in demand, and all the signs point to continued growth - we believe it is the right time for an offer like ours.'

Emma Swinnerton, EMEA head of flexible workspace at Cushman & Wakefield, said: 'Covalt is a really interesting proposition that fills a clear gap in the market.'

'Just as the emergence of flexible workspace drove significant change in the office market, the sector itself is now seeing growing demand from occupiers for hospitality-style service.'

Covalt added there was 'soaring demand' for flexible office space, with the global flexible space market anticipated to grow by 17% between 2020-28, according to the Global Flexible Space Market Outlook 2028 report.

The launch coincides with a report published on the same day suggesting over half of UK landlords are planning to independently develop additional flexible workspace across their portfolios.

The Instant Group, whose digital platforms constitute the world’s largest digital marketplace for flexible workspace listing meeting rooms, virtual offices, flexible office space and coworking memberships, revealed findings of its 2023 State of the UK Flex Market report.

It said flexible workspace demand in the UK was yet to fully recover post-pandemic but with 18% growth forecast over the next two years, demand is expected to reach record levels by 2025 with over 50 mln ft2 of new flexible space sought by occupiers.

78% of landlords have seen an increase in demand for flex over the past year.

Key findings also revealed two-thirds (61%) of flex operators intend to increase their footprint in the next two years, while market imbalances in regional hubs, enduring occupancy rates, and surging demand for sustainable buildings all featured prominently in the report.

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